Whether you’re planning to start a service business or are already running one, you should be aware of the importance of invoicing. After all, you want to be compensated for the labor that you provided to the customer.
An invoice is a file that you send to clients after they’ve enjoyed your products and/or services. The document is proof that the purchaser has an obligation to pay for the goods and/or services rendered. If you have a field service company, you must settle this aspect of business before contracting a client because you’re offering your services without asking for payment upfront. (1)
Invoicing Best Practices
Invoicing for products is relatively straightforward, since you just have to list the goods that the consumer bought and request reimbursement. On the other hand, asking for payment on services can be tricky because they can be challenging to quantify.
With this in mind, here are some of the best invoicing practices to ensure that you get paid correctly for your services:
You’re fortunate to have a service-providing business in this day and age because digital tools can help you automate some invoicing tasks. For instance, if your company focuses on yard services, you can use a lawn care invoice software program to create invoices and even monitor your workers’ schedules and dispatch them accordingly. This ensures that the client receives the exemplary service that they paid for.
You can also automate the process of sending and following up on invoices. This way, you ensure that your payment requests are forwarded to the customer immediately, and therefore, they can process your payments on their end promptly.
Know What to Include
An invoice serves as an official company document, one that has real-life repercussions if you’re not careful. With this in mind, you should make sure that it has all the necessary information for both you and the client. Generally, a service invoice or account should have data about where the job will be done, when it would be rendered, and how it should be billed to the client.
It’s also prudent to create a template on your invoicing software or any other program that you can just pull up whenever you need to ask for payment from a customer. Here’s the usual information that you need to include on your invoice:
- Your business information: You need to place your business’ logo, name, address, and contact info conspicuously on your invoice. This data is crucial for the customer to understand that the document came from you and how they can reach you in case they have questions about the payment request.
- Your client’s details: In the same way, you also need to clarify to whom you’re addressing the invoice. This way, your client would know that the file is meant to be fulfilled by them.
- Unique invoice number: To make the process of storing and searching for invoices more efficient for your organization, you should issue a unique invoice number for each one you send out. It’s as simple as assigning a string of digits for the documents as long as the code isn’t used ever again.
- Invoice date: This pertains to the date when you created the invoice. Ideally, it should also be the same day when you send it to the client.
- Payment due date: One of the best things you can do to ensure prompt payment is to state the due date on the invoice clearly. This way, the client can see it right away and process the payment.
- List of services: As you’ll learn later, you need to write down every service and product that you’re charging the client. It’s best to foster transparency by doing this and earn the customer’s trust.
- Amount due: After itemizing the services and products one by one, you must also highlight the total amount due. Make it more noticeable by giving it a larger font, but not too large that it’d put off the client.
- Payment terms: Disclose your payment terms as well. This should include the methods that you’re accepting such as cash, checks, online payments, and/or credit cards. Additionally, make sure that you include any possible fees that entail late payments. (2)
Take Note of the Estimate
It’s standard industry practice to send an estimate before starting a project with the client. Be mindful of the estimate that the client received and match the price as closely as possible. Of course, there might be times when hours or supplies would multiply, so you ought to show how these items would be priced by then. This is another way to be transparent with your clients and build your credibility.
Send Invoices Right After Job Completion
Once the job is finished, you must send the invoice right away. By doing so, you increase the chances of getting paid quickly and improve your cash flow. You also give your clients time to review the document and double-check if the charges are accurate. (3)
Invoicing for field services can be tricky, unlike products that are more straightforward to quantify and price. Nonetheless, there are practices that you can employ to ensure getting timely payments and improving your business’s cash flow.
- “What Is a Sales Invoice?”, Source: https://www.thebalancesmb.com/what-is-invoice-398303
- “How to Make a Service Invoice and Get Paid for Your Work”. Source: https://www.freshbooks.com/hub/invoicing/make-service-invoices
- “10 Tips to Improve Your Field Service Invoicing – Pt 1,” Source: https://www.servicepower.com/blog/improve-field-service-invoicing-pt-1