5 Benefits of a Good Invoicing System for Your Small Business

| 2 min read

5 Benefits of a Good Invoicing System for Your Small Business

QuickBooks Invoice SystemLet's face it, you are in business to make money and a good invoicing system is key. You provide a service to your client in exchange for money. I once heard that money is a certificate of service rendered. Well if that is the case, you are in business to get clear and correct certificates for your service. Your clients likewise want clear and correct service.

So, once your service is performed, your job of clarity is not complete. You still need to give a summary of services completed. This is often called a bill or invoice. For this discussion we'll stick with the term invoice. When you create an invoice you are considered the vendor and when you receive an invoice you are considered the client. Every industry naturally has its own nuances and terminology of industry jargon. The overall idea here is to present clarity in all aspects of your service. With regards to invoicing your client here are six ways to present clarity and improve your bookkeeping system.

1. Invoice numbers and dates

Use invoice numbers that move in a chronological fashion. Avoid using names or alpha-numeric for your invoice numbers. This gets confusing for your books. Maybe you are ok with that but you shouldn’t be. If your books get tangled then you might double bill your client. From your clients perspective they are seeing multiple invoices for the same job number. Regardless if you are sending multiple invoices for “job name,” give each new invoice a unique invoice number. Your client likely has a good bookkeeping system that announces if an invoice number has already been used.

2. Change orders or deviations from the original job quote

This situation presents a special need for unique invoice numbers. For clarity to your client create a new invoice specifically for change orders, especially if you have already sent an invoice. Do not add to an invoice already submitted to the client. I know the temptation is to do so for invoices that are partially paid or are created as stages of completion. Stick with invoicing per stages or as agreed before the project started. When change orders arise, and they will, be clear about them in a new invoice.

3. Receive payments

As mentioned in the previous bullet, you can more clearly receive payments in QuickBooks, in full or partial, to specific invoice numbers. In this way both the client and you will clearly know which invoice has been paid and how much. If your invoices are all by “job name” it will pose confusion on both sides as to what is paid, what has a remaining balance, and what has not been paid. The client may also be wondering if they are being double billed. Checking this is hard and very time consuming because all invoices are numbered identical.

4. Industry terms and Jargon

Every industry has their terminology and jargon in the language spoken in the office or job site. You may understand it all backwards and forwards, however it is very likely your client doesn’t - that is partially why they hired you. I am not suggesting you “dumb-it-down” but practice some rhetoric and translate it from English to English more commonly used by those not in your field of work. Perhaps the item name needs to be industry specific but then please make good use of the description portion.

5. Track and reconcile payments

With unique invoice numbers, your bookkeeping system will now have another way to track and tie payments to invoices. Without unique invoice numbers receiving payments can get confusing if a payment happens to be similar.

You are a business owner and I am sure you don’t like looking through confusing invoices vendors send you. I’m sure you can appreciate clarity in the bills you receive. So, let me leave you with the invoicing golden rule: Invoice unto others as you as you would have them invoice you.

What have your experiences been with invoicing? Good, bad, sent or received?

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