The classic definition of an invoice is as follows – “a payment request sent by the supplier that lists the goods or services provided to the buyer.”
If you’re working online, chances are, you’ve dealt with creating and sending invoices in the past. And whether you like the process or not, it’s the industry standard online as a way to get paid. So, in other words, it’s an absolute necessity for small businesses and freelancers online to know how to create and send invoices.
As a result, invoices are arguably the most important document for most people. Once the seller provides the buyer with a service, the buyer is obligated to pay the invoice.
Simple, right?
Though that may be the case, there’s a lot more you need to know about invoicing.
They can even have an effect on your marketing and branding.
In this guide, we’ll be looking at how invoices affect your business or brand, why you should be using electronic invoices, and finally, how to start sending invoices that make a difference.
But first, what goes in an invoice, exactly?
As mentioned above, invoices are how you typically get paid. So, to begin with, it’s essential you first list all the products and/or services provided to the buyer who’s going to pay you.
Aside from that, you’re going to need basic information about yourself – such as your full name, contact information, the date of the invoice, and the due date for the payment. The anatomy of the invoice is fairly straightforward but you have to make sure you don’t miss out on any detail and make it any harder for your client to pay you.
For entrepreneurs who want to stand out, you should consider customizing your invoice and tailoring it to the specific client.
To do this, be sure to add your logo, a specific description of what you did for them, and of course a simple “thank you” note at the end. This is a great way to make sure your invoice doesn’t get lost among the other invoices they receive and can lead to you getting paid faster as well.
So, now that you’re familiar with the anatomy of an invoice, it’s worth talking about how they affect your accounting.
Impact of invoices
If executed successfully, invoices can be a huge boost to your accounting system. Here’s how.
The better you’re tracking your financial situation, the longer your business can live.
In short, your invoices are a small part of your bigger financial strategy. But they’re an important one nonetheless because they have a direct effect on how you get paid.
If you’re using your invoices correctly, you can get paid in advance before your invoice is due. By setting late payment fees, where you get paid 2%-10% more if your clients go over a certain date, they’re more likely to deal with your invoice faster.
And since invoices are fully customizable, they also act as an effective tool to further build your brand with your customers.
Once you optimize your invoices and start sending them on time, your payments will start coming in quicker than ever. And if some of your clients manage to slip through the cracks, be sure to follow up with them. It’s your responsibility to get paid, don’t be afraid to chase down late payers.
Until now, the above advice applies to regular invoices as well as online ones. But if your business is online, the below advice applies to you specifically.
Why you should be using electronic invoices
Did you know that in Europe the annual e-invoice volume was around 36 billion in 2016?
This is a trend that’s not showing any signs of stopping and it just goes to show how effective electronic invoices are for businesses.
Right off the bet, electronic invoices are instant, your clients will receive them as soon as you hit send. So, compared to regular invoices, your chances of getting paid faster increase straightaway. Aside from that, it makes the tracking of your finances much easier as it can be integrated into your current tracking and analytics system.
Another important advantage of electronic invoices is customization. If you want to tailor your invoices to your specific accounting system and to make it a part of your company – you can do just that through electronic invoices. Most invoicing software allows you to customize your templates and you can then add your own logo and text that you feel is important. This is a great way to further brand yourself and stand out amidst the masses.
But at the end of the day, probably the best thing about e-invoices is the convenience. The best accounting software is easy to set up and use. Whether you’re a freelancer or a small business owner, you should be looking for accessibility and know what you’re getting yourself into.
So, until now, we’ve been talking about how great electronic invoices are and how they can benefit your business. And now, you’re probably wondering how you can start using them to boost your business. Then the next section is for you.
How to start sending invoices online
Finally, if you want to start sending out electronic invoices and boost your online business, you need to first select a proper invoicing software.
When choosing an invoicing software, it’s important to know what you’re getting yourself into. And it’s just as important to know what you want out of the software. As mentioned above, convenience and usability are some of the most important factors. With InvoiceBerry, you can start sending out and tracking professional invoices just within 60 seconds.
Depending on your accounting system, ideally, you’d also want to implement your invoicing software with it so they work together. For example, InvoiceBerry integrates with Xero via Zapier. And if you’re using Xero as your fully-fledged accounting package – this makes your life a lot easier. Through Zapier, you can connect InvoiceBerry and Xero with as many as up to 46 possible integrations.
Though electronic invoices are a relatively small part of your whole financial system, they’re an essential one nonetheless. When dealing with money, you want to make sure you know what you’re doing and that you’re on top of your finances. This is why it’s so important to have a proper accounting system and that you know your invoices are being properly managed.