Avoid These Business Invoicing Mistakes

Garrett Wilson
July 6, 2022

Landing a client is one of the most exciting moments in business. Handling their project often comes with its fair share of challenges. But nothing prepares you for the chaos that will be invoicing.

According to statistics, 39% of all invoices sent in the U.S. are paid late. Additionally, 61% of these late payments are due to errors in the invoice.

Using Business Invoices

A business invoice is a commercial document with a timestamp that records and itemizes transactions between a business and its client. For example, if goods and services have been sold on credit, the invoice stipulates the payment terms and conditions, including the future date when the amount is due and the payment method.

There are many types of invoices. These include a paper receipt, an online record, or a bill of sale. These invoices play a crucial role in accounting and help prepare the internal documents needed for taxation.

There are several methods you can use to prepare an invoice. The most advised is using an automated software solution to make the process efficient and help you avoid common but costly mistakes.

10 Common Business Invoicing Mistakes You Should Avoid

Here are ten common invoicing mistakes businesses make that can be avoided.

Delaying to Send Invoices

Sending invoices late delays your payments and desensitizes the customers from paying you early for your contractor services. If you don’t have a regular billing schedule or a special agreement with the customer, such as billing them every end, first, or middle of the month, you should send invoices as soon as the job is completed.

You can also negotiate a partial advance payment before starting the work if your profession requires an advance payment to purchase material or equipment.

Unprofessional Invoices

Unprofessional-looking invoices quickly put customers off. Therefore, your business should not send poorly designed and formatted invoices to its customers. Invoices serve as the customer’s last and lasting impression of your business. Therefore, they should be professionally drafted and delivered.

You should use legible font for the invoice’s content, use the correct format, and address the customer well in the invoice. Designing your invoice professionally also allows you to brand your business to the customer and make it easier to remember it the next time they need a product or service.

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Incorrect or Missing Information

It’s easy to have payment disputes and have clients discredit your business if you send invoices full of spelling mistakes, calculation errors, and missing information.

Ensure you’ve included essential details in the invoice, such as the tax number as required by national and state laws, the invoice number, the total amount due, and the payment date. The amount due should also be in the correct currency if you’re billing an overseas customer.

Sending the Invoice to the Wrong Client

Sending your invoice to the wrong client can significantly hurt your brand image apart from delaying customer payments. It may also reveal your trade secrets, especially if you were billing a supplier. You might also expose special discounted rates to isolated customers and lose their trust.

Before sending the invoice, double-check the client’s information, such as the company logo, legal company name, office address, contact number, and email.

Not Mentioning the Invoice’s Due Date

A due date on your invoice enables you to get paid on time since the client can see a deadline for the unpaid amount. Moreover, a due date allows you to charge the client a late fee if they delay the payments to a point where it’s hurting your business.

The due date can also be specified as payment terms for the invoice, where you can avoid mentioning an actual due date but provide a time limit within which the client should have paid the invoice.

Not Itemizing Products or Services

Itemizing products or services sold to customers helps them break down the total amount. However, you should avoid mentioning the items in a line. Instead, each article should be described with quantity, rates, and cost.

Itemizing your invoice can be tedious, especially if done manually. A software invoicing solution deals with this redundancy and makes creating your itemized invoice easier.

Not Being Courteous in Your Invoice

Customers love interacting with a courteous brand. Therefore, as much as an invoice should primarily include billing information for the client, it should also be generous and well-addressed to them.

You can send the customer a “thank you” note after they’ve paid the bill and address them courteously when addressing the invoice. Choose kind words such as “Please pay by …” when specifying your due date to make the customer feel comfortable and relaxed when handling the bill.

Not Following Up With The Customer

Sometimes customers take a long time to honor their invoices. Instead of waiting for weeks without a response, issue a polite follow-up to the customer. Often, you’ll receive an apology and payment on the same day.

Some clients are busy and easily forget to pay their invoices. Thus, a polite reminder will have them clear your bill quickly and maintain a good relationship with your brand. However, some will wait until the due date, while others will want you to remind them before they pay.

Inconsistent Billing

The best way to handle invoices is to send them immediately after the job is done. However, ensure a consistent billing cycle if you want to bill customers differently. This may be every end, beginning, or middle of the month.

Inconsistent invoices are more complicated for the client to honor, which can lead to issues between your business and the customer. On the other hand, consistency with your billing also gives the customer time to prepare for the payments if you’re offering a regular service based on a service-level agreement.

Using a Manual Invoicing System

Many small business owners are still stuck with manual invoicing systems or excel spreadsheets. Unfortunately, manual methods are more error-prone, costlier, and less efficient and productive for the business.

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Avoid these Mistakes Using a Software Solution

The best way to avoid these ten typical business invoicing mistakes is by switching to a robust invoicing software solution. Contact a reputable invoicing software provider to make your invoicing faster, more efficient, and more productive.

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