Even at the risk of recession, entrepreneurs would still want to upgrade their business or improve starting with equipment, machinery, surroundings and every other area that their budget and expenditures would allow them to cover. You need more than your employees to survive every challenge in business and while it’s not always wise to stay on the safe side, you have to admit that there are risks to really avoid so as not to put your business in danger, especially if you’ve just made a great start. You may also see some of our invoice templates.
Elements of a Good Service Invoice
One such risk is anything that involves money, in which case you have to make sure your business operations are properly documented and that transactions with customers are well accounted for, which is best done by proper invoicing. As some of you may have some doubts about how to issue correct invoices here is the basic information every business owner and freelancer should know:
1. Company Information: You want to make sure that two companies doing business together would be able to establish which one is the payer and which party is the payee by labeling them correctly. For instance, if you’re the one making the payment, you should indicate “sold to” so that it’s clear who is responsible for making the payment.
2. Header: This may seem pretty obvious, but make sure to label the document as an invoice in the header in order to avoid or lessen the likelihood of confusion regarding what the paper is, especially when it’s part of a pile of what could turn out to be indistinguishable documents.
3. Date, Invoice Number, and Unique Identifier: You may choose to structure your ID based on your company’s system or your personal preference as the owner, whether it’s something as simple as a file number or a special billing code, or date-based purchase order number. If you’re the one issuing the invoice to another firm for services rendered, asking for payment for freelance work, ask the other party if there are any details required for accounting purposes on their end such as an internal purchase number or billing code.
4. List of Goods and Services: This section of the invoice can be as detailed or generic as you like. The most important parts of the listing include:
- Name of the item or service provided
- The date on which the service was provided
- The rate for the good or service provided
- The quantity of the good or service provided
You can add sub-sections for each item with price changes or modifications, service or product descriptions or any other important information as needed.
12+ Service Invoice Templates
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Consulting Service Invoice Template
Steps In Designing A Service Invoice
An invoice should provide an outline of the services performed, the amount the customer owes, and the place or address to which they should send their payment to you. Following these steps, create an invoice you can use each time you render or perform a service whether it’s for a customer or another firm:
- Include your business logo: An invoice may not be binding and for some, it may just be a piece of paper but it’s still a business document. You should, therefore, make it more official and give it a professional look by putting your company logo on the upper left hand or right-hand side of your business name. If the name of your business comes with your logo, you can use the logo instead of the company name. It’s not required, but it gives your invoice a professional flair.
- Write the recipient’s contact information: The name, address, and phone number of the person or firm the invoice is meant for should be located on the left side of the invoice, just below the header. If it’s a person you’re writing an invoice to, you have to include their most important details such as their name and phone number you have on record.
- Specify your payment terms: Under the invoice information, indicate your payment terms, whether you’ll take cash, credit card, Paypal or any other form of payment. If you charge a late fee or penalty, make sure to indicate the details as well, if you haven’t outlined it somewhere else already, like in a contract.
- Make a chart to itemize the services: If you’re using a word processor in creating your invoice, include a table where you should list or outline the different services you rendered or performed for a client or the goods they bought from you which you are trying to get paid for.
- Calculate the total: You have to calculate the subtotal amount due for the purchase made or services performed, then add any applicable sales tax, delivery fees or other fees and calculate the grand total. Use bold font or highlight the grand total in some other way to emphasize it from the rest of the figures.
Tips In Designing A Service Invoice
If you want to get paid properly, you need to bill your clients. Having a professional invoice ensures that your operations are organized and it can be a major contributing factor for success. After all, without getting paid, your business won’t survive, no matter how great of a service you provide. Follow these tips in designing your invoice:
- Start with good software: It’s important to start right, and while you can be ambitious by having an invoice that looks great, it doesn’t have to be sophisticated. You can choose a system or an invoicing software that will allow you to stay on top of your schedule and have a uniformed, professional looking invoice. You can also use and customize available invoice templates across reliable websites or you can edit the ones included in the article.
- Create invoice policies: Policies are important where money is concerned. Set invoicing policies that are clearly spelled out and make them consistent. Obviously, you need to agree on the billing parameters with your clients so you have to create policies that you can share with them so that both parties are on the same page, leaving no room for confusion and misunderstandings. These policies might include a provision to charge interest or a fee on late payments.
Types of Service Invoice
Thousands of business transactions are carried out every day and all the transactions require a record. An invoice is a name given to this essential record of the transaction and for service providers, these are the ones that are most commonly-used:
- Standard Service Invoice: This is probably the easiest and most flexible type of invoice used that’s why many industries prefer to use it. You would have all the basic information included in any invoice such as the special invoice number, name of the provider, the company’s name, address, contact details, a name of the buyer, address, items purchased, total cost etc.
- Progress Service Invoice: Contractors, third-party companies and service providing firms bill their clients from time to time, presenting a project’s or a service’s progress, quoting the amount payable to them since they have to pay their staff in turn and cover expenses acquired while trying to complete the task or service.
Service Invoice Sizes
Half Size – 5.5″ x 8.5″
Standard – 8.5″ x 11″
Legal – 8.5″ x 14″
Service Invoice FAQs
How do you number invoices?
Although it’s not necessary, providing unique invoice numbers would make you more reliable and professional to your clients. You can start from any number you want but make sure to assign sequential invoice numbers or follow an order of chronology.
What makes invoicing so important in providing service?
An invoice that is properly designed helps a business get paid and provides legal protection for both parties. It is also very helpful for auditing needs. For instance, if you ever get audited by the Internal Revenue Service, your invoicing system will be an appropriate backup for your reported income.
Invoicing is an invaluable tool for accounting in business. It also helps in the monitoring of which people in your company provided the service or made the sale, for sales performance tracking. You need to keep a record of your sales and profit and only a well-created invoice can help you account for service and sales transactions as well as receipts and payment requests. Everything has to be in their proper order if you want to keep your business running, and a wise entrepreneur would know that taking risks where getting paid is concerned, can never be an option.