So, you’ve gone through the necessary hoops and filled in the ream of forms necessary to open a business bank account and to register your company at Companies House. You called up a bunch of mates, asked them to promote your tweets, LinkedIn posts and Facebook posts, and now you’ve got some business rolling in!
Then you wrote an invoice and expected to get paid right away...but, instead, the accounts department shot your invoice back at you and told you to correct all the errors?
Indeed, there is something to know about writing invoices. And if you’re registered for VAT and are writing invoices to other companies who are also VAT registered (B2B) then there is a lot to know — your invoices must have certain information on them to be considered legally valid.
The content of a legally valid invoice depends on the product or service you’re offering, your and your client's business ownership type, tax regime and many other factors. There is a lot to learn.
Well, fear not: One of the things we wanted to do when building the GoSolo business and banking app was to make the invoicing procedure as seamless as possible. If you use GoSolo for your business banking and expense management, then all of the following is already taken care of automatically for you within the app.
If you don’t use GoSolo, here’s what you need to know about writing invoices in your business so that you can get paid on time.
According to the UK Government, all UK invoices need to contain:
If you are a Limited Liability Company, then you must write your company name the same way that it is written in your Certificate of Incorporation.
That’s a lot of information!
Customer Perception is a crucial aspect of running a successful business. It is even more important when you are charging “premium rates” for your work.
Customer perception is created in a number of ways, and one of the ways is the manner in which you handle and present your invoices.
Your invoices should be professionally designed and look sleek. Moving low-resolution image boxes around a Microsoft Word file is simply not going to cut it. Even though you might not notice the flaws, that amateurish approach will come across like a sledgehammer to your customers.
Your client's accounting department might deal with hundreds of invoices daily. You only have a few seconds to grab their attention and ensure that your invoice is properly recorded and then paid promptly. That's why GoSolo created a clear invoice layout where key pieces of information are highlighted and easily readable.
Consider your invoice a piece of promotional material. That material is supposed to elicit payment from somebody. The professionalism of your invoice goes a long way to creating a certain perception about your business in your client’s mind.
GoSolo comes prepackaged with an exquisite invoice template for you to use in your business. It is a slick and professional template that can still be distinguished with your business identity. All you need to do is specify your logo and tweak the colour. We take care of the rest for you.
If you wish to get paid on time, you need to ensure that your customer actually received the invoice.
If you are sending invoices by email, it is not uncommon for that invoice to land in spam, especially if you have never invoiced that particular customer before.
Email providers are notoriously picky about subject lines that read something like “Invoice #123456” because it is a favourite trick of spammers to elicit money illegally from people!
Give your client a call and let them know that you sent them an invoice. Then have the customer acknowledge receipt of the invoice. This will go a long way to prevent the all-too-common excuse of “Oh, but I didn’t receive it” if you don’t get paid.
You can send a reminder regarding payment one or two days before the invoice is due.
Certainly, you should send “nudges” after 7 or 14 days if the invoice remains unpaid.
Ideally, you would have some accounting or invoicing software do this for you so that you don’t have to maintain complicated spreadsheets to keep track of who has or hasn’t paid you.
Chasing clients on payment terms can be a challenging and time-consuming task for entrepreneurs. Simple email notifications about payment is probably the easiest single instrument for a significant reduction in the number of late payments.
You don’t necessarily need third-party software to do all your invoicing for you, but it is easy to get confused with invoice numbering, invoice dates, payment chase-ups, etc. if you don’t use third-party software.
Even if you only write a few invoices a month, it’s still a good idea to use some kind of software to create those invoices. Creating them manually is simply too risky in terms of remembering to put all the information in each invoice every time.
It’s also really slow.
Using some accounting or invoicing software to generate your invoices and keep track of paid and unpaid ones is essential for a business of any size.
And then there’s the matter of getting paid. Sometimes, clients simply forget to settle a bill (or it lands in their spam folder and they don’t see it).
Other times, well, they simply don’t pay it and need to be reminded!
Nothing is more frustrating than doing work in good faith and then having to chase after that money repeatedly. Ideally, your invoicing software comes packaged with a reminder feature that chases up unpaid invoices and aged debtors.
One of the problems with using separate tools for invoicing and banking is that the two are not always in sync. Not all banks support automatic bank feeds. And, even if they do, there is often a delay to when the banking data finally gets fed into the accounting/invoicing software.
This can occasionally frustrate the customer with an incorrect reminder email when their payment has not yet been reconciled in the accounting system.
We believe that the following aspects of a business are inextricable from each other and so should all work within the same ecosystem:
Automatic invoice reminders save you time so that you can carry on getting more business while your accounting/invoicing software takes care of chasing up payment for you.
Because GoSolo is the banking and the invoicing app, the two are always perfectly in sync.
If you don’t get paid, your options are, roughly:
It helps tremendously when a client has acknowledged receipt of the invoice. GoSolo has an automatic feature built into it that asks a client to accept/confirm the invoice.
Our philosophy at GoSolo is to keep things simple. We wanted to simplify the business and banking experience for solopreneurs. One-person-shows don’t have time to fiddle with accounting, bookkeeping, invoicing, chasing up money and all the other mundane (yet necessary) tasks required to keep a show on the road.
That’s why we made invoicing an integral and essential part of the GoSolo offering right from the start, including invoice payment reminders and bank reconciliation.
If you would like to get GoSolo free for two years with no transaction and banking fees, as well as integrated invoicing and payment reminders built into it, you can open an account here.