Chances are if you are working with clients or need to keep track of inventory and sales, you will likely be using invoices. Invoices give you information about the buyer and the seller, and if done correctly, it will minimize misunderstandings with your clients so that you get paid on time. If you are not familiar with this tool and hope to use it for your business, it’s important that you understand the different components that make it up.
A simple step that you do not want to overlook is including up-to-date buyer and seller contact information.
Using an invoice number is helpful for when you or your client need to reference the transaction.
Payment Terms and Due Date
Always include a clear due date and terms. You should be stating specific payment terms (due on receipt, net 15, etc.) to reduce ambiguity. While it is possible to agree on a later payment date, customers should pay you within 30 days. When setting your payment terms, it is important to be mindful of any holidays or other disruptions that may delay payment. State the details of how and when you want to be paid in these terms.
Line Items and Total
Give your clients an itemized list of the services or products they purchased. Be sure to include a total amount.
Thank You Note
While this step is not necessary, it is a nice added touch. Including a quick “Thank you for your business” shows professionalism and gratitude for the client.
How Long Should I Keep My Invoice
Invoices and other documents such as receipts, payroll records, and bank statements should be kept for about 3-7 years. Keeping a record of these forms helps you provide evidence of any income, deductions, or credit on your tax return.
From payroll to tax reporting, financial reports, and more, the Bakersmith Bookkeeping Group team can help you handle your finances so you don’t have to! Review more information throughout our website on ways our team can serve you and your business.