Do you remember the first job you ever had? It could be as small as helping out with chores around the house as a kid or as monumental as working your first-ever job at say, McDonald’s. When the task is done, you (hopefully) got paid for your work—whether that’s in the form of a verbal reward or a monetary one. Even though invoicing wasn’t a part of those initial gigs, little did you know at the time, you were doing all the work that leads up to it.
And it’s the same spiel.
As a “vendor” or “supplier”, you helped out around the house by cleaning up the dishes or doing the laundry. At McDonald’s, you made the food or monitored the till. For putting in the work (or service), invoicing is the process of recording your services, then getting paid for them.
Why bother with invoicing?
You do the work, then you get paid for it. That’s how the world works. invoicing is the accounting-side of the business where you send an invoice or record of transaction and get paid for the work that you provide or the products that you sell.
At its core, invoicing is how you generate revenue for your small business through a piece of written documentation.
Let’s unpack the benefits of invoicing and why you should care:
1. Boost cash flow, so that you have more cash on hand
If invoicing is sending a documented reminder to your client that they need to pay you, then wouldn’t it make sense to remind them as early as possible? As a small business owner, the timing of when you get paid matters—it directly affects your cash flow. As such, you should set-up internal processes that help ensure you get paid on time, every time. One way is to set up invoice reminders on your calendar to send out invoices the moment your project is complete. With invoicing software, you can automate these reminders so that your mind can focus on other business-critical tasks that require your attention—like client work.
2. Predict your income
Every invoice includes an invoice date and a payment date. These dates help you predict your income and plan your business expenses and strategic initiatives accordingly. For example, you wouldn’t want to spend heavily on hiring a consultant to redesign your website if you know that you’re running a little lean next month. Instead, invoice dates—and follow-ups—help you predict your income, and change course towards what makes sense financially.
3. Invoicing helps you know the numbers
Even if you’re not a “numbers” person, invoicing is crucial. It’s more than just sending out an invoice and twiddling your thumbs while you wait to get paid. Tracking your invoices gives you a birds-eye-view of your entire business—especially if you leverage the invoicing tools available. Accounting software and invoicing software offers small business owners key metrics to optimize their cash flow management. From total net invoiced and the average time to pay to outstanding invoice amounts, you can really dig deep into the invoicing process to identify insights that can prompt action.
What goes in an invoice?
Although invoices can vary based on your business, industry, and personal-branding preference, at its core, the outline is the same. Here’s what you should include in every invoice:
- Your business name and logo
- Business contact information
- Client name and contact information
- Invoice number
- Payment terms
- Due date (or payment date)
- Bill to (payer contact information)
- Product or service details
- Sales tax
How to start invoicing
1. Start with a professional invoice template
Creating and sending professional invoices is more than sending a piece of paper to a client. Your invoice is an extension of your business: it should look and feel not only professional but also communicate your brand as thoroughly as possible.
Easy To Use. Perfect for those who have never invoiced before, invoice templates are easy to use because it lays out exactly what you need to include and where. Simply download the invoice template of your choice in Google Docs, Google Sheets, Word, Excel, or PDF, and you’re off to the races! TrulySmall™ also provides tailored templates for different small business owners and solopreneurs like freelancers, designers, consultants, contractors, and developers.
Missing out on other features. Invoice templates are great beginner tools for small business owners, but it largely lacks in features and capabilities. Invoicing apps, on the other hand, offer a suite of tools to improve your invoicing like saving your customer information, pre-filling your business information, and recording payments to help you better make sense of your business cash flow.
Harder to learn the numbers. Like we mentioned above, digging deep to know the numbers behind your business starts from invoicing. But if you find yourself bogged down invoicing from scattered documents, it’s even harder to bring it all together to make meaning out of the numbers. Invoicing apps like TrulySmall, for example, give you insight into the most important parts of invoicing: unpaid invoices, total unpaid, total paid, and a filter to view all your invoices in one place.
2. Set-up an invoicing schedule
Get clear on an invoice schedule that you can follow each week. For example, make it a habit to invoice the day that your project or services are completed. Be sure to decide the payment terms and include them on your invoice.
Invoice payment terms can include:
- Net-30 days. This is the most common type of payment term. Net 30 means that your client must pay the total invoice amount within 30 days of the invoice date (the day you send out your invoice).
- Upon receipt. Another common type of payment term. This means that your client is expected to pay the invoice total when they receive the invoice.
- Net-10, 15, 20, and 60 days are all other payment terms that you can offer your clients, depending on when you want to be paid.
By clearly stating your invoice payment terms, you can much easily stay on top of your payments and outstanding invoices, and make follow-ups and corrective actions accordingly.
3. Leverage invoicing tools
Technology enables better, faster, more streamlined ways to do things, including invoicing. Nowadays, so many tools are available to automate existing business processes. Invoicing apps are one example. They help small business owners keep the invoicing flow moving, to help get paid as quickly as possible while spending as little time as possible on the administrative side of accounting.
There’s nothing wrong with invoicing manually with invoice templates. At the end of the day, it still gets you paid. However, if you are looking to automate invoicing specifically, TrulySmall’s Invoicing App lets you do just that—and for free!
Reduce time spent invoicing. You can still invoice and get paid on-time, but make that tennis lesson with your instructor. You can also spend time indulging in a hearty meal with your family without your mind wondering if you sent that invoice or received payment. Invoicing apps leverage the latest technology to help you save time so that you can focus on what matters. Instead of populating invoice details, TrulySmall™ Invoices learns your business and invoice details and pre-populates the information for you—making the invoicing process that much quicker.
Store and track your invoices in one place. Some people have systems and processes in place to track their invoices, but most probably don’t. Using an invoicing app like TrulySmall™ allows you to store and track all your invoices in one centralized location. Because it’s stored in the cloud, you can access, review, and send your invoices from one workplace, no matter where you are. All you need is a laptop (to view the web-based browser) or a mobile device (to access the TrulySmall™ app—available on the App Store and Google Play), and you can start invoicing!
Learning. If you’re not typically familiar with learning new tools, then adopting a new invoicing app might be a whole new realm for you. However, TrulySmall™ Invoices is purposely built for the truly small businesses—from solopreneurs to microbusinesses—making adoption easy, streamlined, and straightforward. Plus, the entire customer success team at TrulySmall™ is here to help! All you have to do is ask the question (there are no stupid ones!)
Let’s bring it all together
Invoicing is an important function of running your small business because it’s how you bring in the money. Now that you’re equipped with the advantages of invoicing properly, the steps you need to take to start invoicing, as well as both the benefits and drawbacks to each step, you should be one step closer to being confident in this critical aspect of running a business.
Like always, the TrulySmall™ team is always here to help and answer any questions you might have. Give us a shout or experience the TrulySmall™ Invoicing App (on iOS and Android) today to see how easy it is (it’s free!).