Invoices are essential for any small business: they make it clear how much a client needs to pay you, when payment is due, and what the payment is for. If you’re not already using invoices, you’re missing out on several benefits.
Improve Your Bookkeeping
With invoices, you have a record of the cash coming into your business. This is useful for bookkeeping purposes, as it allows you to quickly calculate your revenue from sales over a particular period.
Use Recurring Billing
If a client receives the same services or places the same order every month, you can set up recurring billing. This will automate the sending of invoices — meaning there’s one less thing for your team to worry about.
Receive Payments on Time
Invoices serve as a gentle reminder that your client needs to pay you on a specific date. It also provides new customers with the details they need to send payment and ensures they send the right amount.
Have a Record for Taxes
The IRS recommends using invoices, among other documents, to demonstrate that you are reporting your sales accurately when you file your taxes.
Eliminate Back-and-Forth Communication
Simply sending payment information by email is a recipe for disaster, not least because it increases the chances a client will message you back with questions. Plus, if you send information in an email, it is much more likely to become buried in clients’ inboxes than if you send an official document.
Enhance Your Brand Image
Invoices also look far more professional than emails. This enhances your brand image — which is extra important if you’re a startup working with your first few clients.
Protect Yourself Legally
There’s always the risk that a client will decide to involve your business in a lawsuit for fictitious reasons. An invoice can act as a legally-binding agreement, showing that the client agreed to pay you for the services you provided by a particular time.
Invoices have a role to play in business analytics. They hold valuable data about what services are the most popular with what kinds of clients and whether there’s an additional demand for particular services at certain times of year. You can use this knowledge to pour more resources into your most popular services, consider if you want to keep offering the least popular, and better target your marketing to see business growth.
Keep Track of Inventory
Invoices can help you keep track of how much inventory you have left and when you should order more. Even if you’re selling services rather than products, you can use invoices to figure out when to purchase more materials — according to what services you’ve provided and what are likely to be in demand in the near future according to past trends.
Making your own invoices is tedious and time consuming. Plus, unless you have a background in graphic design, you’ll struggle to create invoices that look professional. To help you out, we’re offering five different styles of invoice templates for you to use. Download them now and choose the one that best matches your brand image.