invoice a customer

Chapter 14

When to Invoice a Customer

Author: Bhaval Patel

When to Invoice a Customer - Best Practices for Small Businesses

There is a general question “When to Invoice a Customer“. An invoice should be sent immediately after a customer’s order has been met successfully. For a company supplying a product, the invoice is sent when the customer receives all the goods. For a company that offers its services to a customer, an invoice is sent immediately after the full service has been rendered.

In this aspect of the guide, we’ll cover:

  • What is an invoice?
  • How to send an invoice
  • Invoicing mistakes a vendor makes
  • Payment terms
  • Following up on invoices

What Is an Invoice?

An invoice is a document prepared by the vendor to receive payment for the service and goods supplied. It can also be called a list of all services and products the vendor provides the customer with and the prices for every quantity.

When to Invoice a Customer

The commencement of payment begins when a customer first receives the invoice.

An invoice number is often used to reference the customer’s purchase order number. P.O number is issued by the customer and is seen as an agreement between the vendor and the customer to explain the details of a sale. It is given by the customer at the initial stage of the transaction.

A P.O that is completed and cleared by the customer leads to payment of an invoice. This means that the list on the vendor’s invoice has been pre-approved.

How to Send an Invoice

An invoice can be delivered to the customer in different ways:

  • By Mail: This is the slowest means of sending invoices, this method is also unreliable as the invoice may sometimes not get to the customer.
  • By Email: sending invoices by Email is one sure way to get it delivered to your customer as quickly as possible; it is a trusted and secure means.
  • By an Accounting Software: a majority of modern accounting software now comes with an internal email system that can send to any customer with just a click. Accounting software also helps you follow up on the invoice and notifies you when the invoice is overdue.

Invoicing Mistakes a Vendor Makes

Invoicing Mistakes a Vendor Makes

Sometimes, some mistakes are inevitable when invoicing a customer; these are some of them:

  • Wrong Dates

The date on an invoice you’re sending out should be the date you prepared the invoice. This date is meant to be on top.  Another date to take note of is in the description of goods and services; this is the date the goods were delivered or when the service was offered.

  • Incomplete Vendor Details

When a customer sees that the vendor details are incomplete, he feels reluctant to make payment soon. Complete vendor details include business name and address, Email, and phone number.

Most times, the customer looks out for the vendor’s name on the invoice. Most large firms do not make payment when detail is missing from the vendor’s information.

If the vendor accepts different payment methods, it is best to signify in the invoice so the customer will have to choose the most convenient means to pay faster.

  • Misplaced Purchase Order Number

A purchase order number shows the department in charge of paying invoices that the invoice has been approved before getting to their desk. Without a purchase order number, payment cannot be made for an invoice, so the payment is placed on hold until it is resolved.

  • Incorrect Total

Do the numbers correlate? This is a prevalent issue for invoices created in MS-Word. Hence, the vendor usually needs to recreate and resubmit the invoice, as the client cannot adjust it themselves.

  • Unclear Details

When a vendor supplies services to a company or goods, they must state in clear terms what they have provided, a detailed explanation will clarify the customer if they are confused.  For reference purposes, it is important to explain what service has been provided.

  • Omitting the Subject Heading In the Email

Sending invoices through Email requires professionalism from the vendor.  A vendor should not send an invoice to a customer with a casual approach.

Annie sends an email to Mark, asking about his welfare and how’s life with him, she proceeded to inform him on some issues that are not business-related. At the end of the email, she writes, “here is a copy of the invoice.”

Mark feels tired to check the invoice and decides to do so some other time. Later, when he starts checking unread emails, he skips Annie’s message with the attached invoice because there’s no subject line that shows it is an invoice email.

Annie would have written about the invoice in the subject line of the Email, something like “Annie’s Pastries Invoice,” so Mark does not skip the message.

Payment terms

Payment terms are set rules that are decided by the vendor as regards the payment they are getting from a customer. They are usually found at the lower part of the invoice. The most common invoice types are ” net 60 days”, “net 30 days” sometimes you’ll find 90 days or thereabout.

Both parties should discuss payment terms before the invoice is sent. This is as important as receiving payment quickly. For a large firm, an invoice that’s due upon receipt may be delayed because they have their system of paying vendors. In situations like this, the vendor will have to reach an agreement with the company to strategize a payment date.

If a company supplied by a vendor has a policy of sending our payment of invoices twice in a month, say 15th and 30th. A vendor expecting payment due upon receipt or sooner will have to wait until the company payment date to get paid. If the vendor sends the invoice on the 1st of the month, he has to wait for 14 days to get paid.

Following up on invoices

Some business owners often relent in following up payment after the invoice is overdue. They feel reluctant to keep reminding customers of an unpaid invoice. If you have an unpaid invoice, do not conclude on losing the invoice because it’s due date is passed. Follow up on your unpaid invoices with the following methods:

  • Send them an email

When a customer fails to pay up late invoices, include the original invoice in a friendly email and send it to the customer. You can ask for payment immediately after you send the email if you need the payment to settle other vendors on your list.  If you are not in hate to make payments to other vendors, you can exercise patience, so you don’t affect the relationship with the customer.

  • Call the Customer

Phone calls help you get a direct touch with the customer; it is a good approach to call your customer and remind them of unpaid invoices. When you’re discussing on the phone, your invoice should be in front of you so you can remind him of the amount he’s to pay. You can send it immediately after you phone the customer so that he can have the payment in mind.

How to Invoice a Company: A Practical Approach for Business Owners

Small business owners need to have good knowledge of how to properly invoice their customers to get paid faster, even though they’re dealing with a company or an individual.

If you’re a business owner that offers credit to your customers often, supplying goods or services and getting payments later, you’ll have to request payment by sending an invoice.

Learning the art of invoicing will help you get paid easily and reduce your paperwork. It will also help you cut down on the cost of other materials and labor, as well as managing your financial situations.

For a simplified invoicing process, MixBit invoicing software is an easy to use invoicing solution that helps you get paid in a good time.

This aspect of the guide will cover:

  • Selecting an invoice template
  • Adding products and service to the invoice
  • Summing up the total price
  • Adding essential information
  • Sending the invoice
  • Following up on an invoice

Selecting an invoice template

Make sure that you send an invoice almost immediately when you finish up the customer’s work. According to Forbes, almost 80% of invoices sent out the same day jobs are completed get paid.

To prepare an invoice, the first thing required of you is to choose a template. In Word, Excel, Google Docs, and PDF programs, you’ll find already existing templates you can use for your invoice.

Some invoicing solutions help you download templates online and personalize them for your use. This is beneficial for freelancers. You can download your preferred template and open it in any program that can draft an invoice.

Adding Products and Services to the Invoice

For each product, there should be a separate line that clearly indicates their description. Your description has to be detailed so that the customer can understand you in clear terms. Explain in quantities for products supplied and describe the service you’re charging them for. Do not miss out on the dates you supplied the products or offered the service.

Every customer wants to be sure of what service they’re paying for. Do not mix things up in the process. Simplify each service as possible as you can so you can get paid in time.

Include your hourly or flat rate pay, as discussed with the customer when negotiating. If you’re working hourly rate, add the total number of hours you worked.

Summing Up the Total Price

Add up every price and hours to make the customer see what he’s paying for. If applicable, add the tax and discount rate or any outstanding balance. Sum up everything to a total.

If you’re going to charge a late payment fee, you must have agreed with the customer before preparing the invoice. Additional charges the customer is not informed about may be confusing and may breach trust in customer relationships.

Adding Essential Information

The invoice you send to a customer must be professional to prove your authenticity to the customer. You must always include your business logo, the date you’re issuing the invoice, invoice number, business name and address, email, phone number, the date the payment will be due, and reference number. Also, include your payment terms and a thank you message at the bottom of the invoice.

Adding thank you and appreciation notes will help you get paid faster. You should be polite in your gestures so the customer will be impressed. Do not forget that your payment terms will help customers hasten up payment.

Your preferred payment methods should be included to avoid late payment.

Check that your invoice has no spelling or mathematical error. Mistakes like these can cause a delay in payment, and the customer may see you as a business owner who’s not serious. If you’re dealing with a large firm, they’ll not tolerate errors like these.

Sending the invoice

In sending the invoice to your customers, there are few ways by which you could send it. You mail it to the company address after printing on paper. You can as well send it immediately through Email, or fax. If you use accounting software, you can send it through the email system in the software.

Hi <insert client name>,

Please find attached an invoice for <insert project name and details>. Thank you for your business. If you have any questions, please don’t hesitate to contact <insert name> at <insert contact details>.


<insert your name>

Check again to be sure that you’re directing the invoice to the right person. If you agreed to execute the contract with an individual in the company, the same person doesn’t need to be in charge of payment.

Since you’re working with a company, the finance or accounting department should be in charge of paying invoices or a standalone agency that is contracted to help handle finance. You should always communicate with your contact to be sure.

You also have to be aware of the company’s billing cycle; maybe the only time they make payments is the 15th of every month. You’re advised to send the invoice when the company payment date is fast approaching. When you’re aware of the billing cycle, you’ll know how and when to follow up on every invoice properly.

Following Up on an Invoice

After sending the invoice to your customer, your job does not end there. Sometimes, companies don’t manage invoices well; it is your duty to follow up on the invoice to ensure that you get paid. An invoicing solution helps you send reminders to every customer you invoice with the software in automated routines.

People also ask:

  • How do you send an invoice to a company as an individual?
  • How do you send an invoice to a company for contract work?

How Do You Send an Invoice to a Company as an Individual?

Here are some helpful tips that help you portray professional traits when you invoice a company as an individual:

Have a professional header on your invoice. It is best to use your business name or preferably your full name, add all other essential contact information so that it can be reached in case there’s a need for questioning. As a business owner, your business should have a logo, add it to the invoice.

When selecting a template, use a professional type. Invoice templates are free, and they are good enough to make sure you don’t miss any detail. If you use invoicing software, your invoice will look more professional to the customer, because it comes with options for them to pay instantly through online means.

As mentioned earlier, your invoice should not be directed to the wrong person or department. Large companies have departments that handle invoices and payments. You should know him to forward the invoice so your invoice doesn’t get forgotten.

The invoice you send should align with the company’s billing cycle. Most companies have a specific date when they send payments to vendors. You can confirm the billing cycle of the company from your contact to be on a safer side.

Follow up on your invoice properly. Do not annoy a customer because you’re requesting payments. There may be a reason why the company has not sent your payment. From time to time, keep a tab on the customer in a polite manner and resend the original invoice to them, so they don’t have an excuse.

How Do You Send Invoice to a Company for Contract Work?

These steps will put you through on how to send an invoice to a company for contract work:

  1. Use the best invoice template you can find since you’re dealing with a company. Do not forget to add the invoice number and P.O. number if applicable. And state your payment terms and policies in a clear tone. For example,  ” payment is due within 30 days”.
  2. Explain in detail what you have worked on. Include columns for a work order number, rate per hour, total hours worked, job details, unit cost, and subtotal. If you’ve been handed a work order, you must ensure the details on the invoice are the same with that on the work order.
  3. Your tax charges and discounts if applicable.
  4. Add all the payment methods your company accepts and late payment if it is an agreement with the customer.
  5. Forward invoice to the right contact and confirm from the contact if they have received the invoice.
  6. Sometimes emails can be too much on their list. Do proper follow up if you haven’t heard from them after sending the invoice.

How to Invoice as a Consultant

To run a consulting business, you have to be responsible for tracking hours as you work and invoicing your customers. As a consultant, you are to record the time you spend working on projects accurately and invoice your customers the right information to get paid faster.

How to Invoice as a Consultant

In this aspect of the guide, you’ll be taught as a consultant how to invoice your clients and get paid in time. Here, we’ll cover these topics:

  • Invoicing as a Consultant
  • Invoicing Tips  for Consulting Services
  • Free templates for Consultant Invoice

Invoicing as a Consultant

As a consultant, your invoices should look professional and make the customer understand you’re a serious person. The service you have rendered and the hours it took for the service to be rendered should appear in the invoice. Below is a guide to put you through invoicing as a consultant:

Keep Record of The Hours Worked

A consulting job is a business that deals with hours, meaning that customers are billed by the hour. If your billing is always by the hour, you should build a system that helps you keep a record of hours you have worked.

The system should perfectly fit what you do and how you work so that it can be reliable. Every hour your work should be recorded so that there’s no omission whatsoever.

Add A Clear Header

Your consultant invoice should contain a clear header that appears on every other invoice you create. Your invoicing bill should contain the following:

  • Your business logo
  • Your business details, including name and address, email and phone number
  • An assigned invoice number and the word “Invoice.”

Add Your Client Contact Details

Underneath the header, create a space for your customer’s details, and contact information.

Every invoice you create should carry the correct information about your customer. If you’re working with a large company, you may be directing the invoice to someone else in another department and not your direct contact.

Be sure to get the correct details of the contact you’re sending the invoice to help you get your payment faster.

Include The Date

Your invoice should contain the exact date you’re creating it. The date should be positioned just below the customer’s contact details. For record purposes, you and the customer can file the invoice.

Assign An Invoice Number

Every invoice you create should have a unique identification; as such, the identifier is in the form of numbers. It is always good to number the invoice so you can reference it for bookkeeping purposes. To number your invoice, start with a sequence, something like 001,002, and so on.

You can also create your system of numbering with the combination of numbers and dates. The invoice number should be in the upper part of the invoice.

Explain Your Services

On the part where you’re to account for the service rendered, make sure you describe each service for a proper understanding of the customer. The section should include the following:

  • Description of each service
  • Number of hours you’ve worked
  • Your hourly rate
  • The total amount for each of the services

With these inclusions in your job description, you’ll look organized to the client.

State Your Payment Terms

Your payment terms inform the customer on how you want to get paid. It should appear at the bottom of your invoice. Before entering the contract with your customer, you should discuss the payment terms with them so you can both reach an agreement, and there won’t be confused when the customer sees the invoice. Your payment terms must also list out what payment methods you accept. For example:

  • Credit card
  • Online payments
  • Cash
  • Checks
  • Mobile payments
  • Online payments
  • Recurring payments

If you have late payment policies, your payment terms should state them. And add the exact charges for late payment.

Include The Payment Date

The payment due date in your invoice will let the client be aware that after the stipulated date you include, he’ll have to pay extra charges, if applicable. To help the customer get the message, you can type it in bold fonts.

Giving the actual days helps to get paid faster.

Add The Total Amount Owed

The total amount you have worked for and the total amount you’re expecting from the customer should be added to the invoice. After adding all the subtotal from the hours worked, you should also add applicable taxes or discounts. The total amount must be clear enough for the customer to see.

Invoicing Tips for Consulting Services

Invoicing Tips for Consulting Services

To help you carry out invoicing properly, you need a few accounting skills. These tips can replace the accounting skills to help you with proper invoicing in your consulting business:

  1. Automate Your Hours Logged

While you’re working, instead of looking at the wall clock or your wristwatch to help you keep tabs on hours, have a browser extension that helps you track time as you work. With this, you save time and concentrate on important things. If you work with an accounting-based solution, the system can log your hours on a cloud-based solution, and help you track time.

  1. Send Invoices Immediately You Complete The Designated Project

To avoid delay in payment, you should not waste time in creating and sending out invoices. As soon as you complete a project, send the invoice to the customer so you can expect payment soon and have time to concentrate on other tasks. Also, the best time to draft am invoice is immediately after finishing the work, because you still remember how you have spent the hours you’re billing the client for.

  1. Request Upfront Payment

If you are working on a project that will take a longer time to complete, say months, you can ask the customer for an upfront payment. Upfront payment may be in 20-50 percent of the total amount you’re going to be paid. Upfront payment helps your cash flow and help you to be active in the long project, so you don’t encounter difficulties. Upfront payments help you secure a certain amount of the total fee from the customer and puts you on a safer side.

  1. Be Friendly

It is required of you as the payee to maintain a healthy relationship with your customers as you follow up on your invoices. While you’re resending every follow-up message or you’re calling the client to Inform them of late payment, be friendly and polite in your approach. When a customer sees your attitude towards requesting a payment, there’s a high chance that you get paid shortly after.

  1. Accept Different Payment Methods

When you work with global customers, you’ll need to accept different payment methods because you’re in different parts of the world. Even if four customers are within the same country with you, accepting different payment methods means you are getting paid faster. Some customers prefer recurring payments to other methods if you don’t accept recurring payments, which means such a customer may delay your payment. If you use invoicing software, your clients can pay you through different means.

Free Templates for Consultant Invoice

If you’re unable to create your invoice template, you can always download and personalize invoice templates. This process is easy with MixBit invoicing software which provides you with several templates and also a free invoice template for consultants.

You can download the online templates into different document processing programs so your invoices will look professional when you send them to clients.

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