Between tracking billable hours, listing services and charges clearly, calculating prices and taxes correctly, and ensuring the right people receive the invoice for payment…well, it’s a lot. And yet, all that effort falls apart if clients receive confusing, unprofessional, or downright inaccurate invoices.

Before you press send on that PDF, give your invoice a quality check to avoid common mistakes that could cost you sales and revenue. Read on to understand why proper invoices are critical for every small business and learn some key strategies to avoid problems that slow down getting paid.

Why Proper Invoicing Matters

An invoice serves an important accounting purpose: to request payment owed for products or services rendered. But it’s also a reflection of your professionalism and attention to detail.

Clients frustrated by sloppy invoices containing errors, omissions or confusing charges end up lacking trust in your business. The next sale becomes harder to close when a client lacks confidence due to past payment issues.

Additionally, correcting invoice problems eats up your own precious time. Having to resend paperwork, explain charges or track down payments means losing billable hours.

Creating quality invoices, the first time accelerates cash flow so you hit revenue goals sooner. When you appear organized and attentive to client needs, you build credibility prompting referrals and growth.

So, avoid losing business over simple invoicing mistakes. Review these common trouble areas to prevent problems for future billing cycles.

1. Failing to Include All Necessary Details

The easiest way to have an invoice sent back for clarification or corrections is leaving off important information. Be sure invoices clearly state:

• Your business name, address, phone, email
• Logo and branding elements
• Invoice number for your records
• Client name and billing address
• Date invoice created and period of services covered
• Line items detailing the products/services provided and relevant metrics like quantity, price, tax, etc.
• Item IDs, SKUs or product codes
• Total amount due
• Due date for payment terms
• Late fee policy
• Accepted payment methods

Without these details, delays or nonpayment becomes more likely. So, reference this list when creating invoices to confirm no key info is missing.

Pro Tip: Load common invoice details like business info, branding, terms, and payment settings into templates using time and billing platforms like Time Tracker. Then accurately customize each invoice with a few clicks.

2. Making Calculation Errors

Simple math mistakes undermine professionalism and accuracy. Always double check:

• Line-item amounts reflect the accurate hourly rate or pricing model
• Use latest sales tax rates on products
• Verify extension calculations on line items using the quantity x rate
• Confirm addition of all line items matches the total
• Check percentages on discounts or fees applied
• List any late payment fees from prior unpaid invoices

Seemingly small math issues can trigger bigger payment delays and accounting headaches. While accounting software does the heavy lifting on calculations, give your invoice totals and figures a final manual review.

3. Using Confusing Invoice Formatting

If clients can’t clearly interpret your invoices, delayed payments, or rejection increases. Support easy billing review using:

• Grouping: Related line items by project, product, service, delivery dates, etc.
• Labels: Clear column headers like Date, Hours Worked, Hourly Rate, Line Total
• Highlighting: Subtotals, taxes, discounts, and final amount due
• Separation: Credits or expected payments apart from total owed
• White space: Avoid cramping too much text onto the page

A few time tracking or billing apps even include templates to maintain a consistent, professional look. Check out software like Time Tracker for invoicing automation with polished templates.

4. Failing to Reference PO and Job Numbers

If clients use purchase orders and you assign job numbers to projects, link this key info on invoices. This helps answer client questions when they are auditing or reconciling your charges for payment.

Set defaults in your accounting system so PO or job numbers auto-populate future related invoices. The less manual data entry, the better!

5. Not Sending to Correct Person

With shifting roles and staff changes at organizations, the past accounts payable contact may no longer handle vendor invoices. Before sending an invoice, proactively confirm:

• Special handling codes needed for accounting?
• Has the AP contact changed recently?
• How can I get invoices directly to the right approver?

Updating contacts minimizes invoice rejection or processing lag simply from sending to the wrong place. This extra attention to detail keeps cash flowing.

Expand Beyond Invoices to Track Time Too

As important as solid invoices, recording and tracking billable time must also run efficiently to operate a profitable services business. Don’t rely on memory, notes scrawled on napkins, or frantic Friday scrambles to tally hours for invoices.

Professional time tracking offers several key benefits:

• Accurately log hours on projects daily using desktop timers or mobile apps.
• Tag time entries to client accounts and projects.
• Generate reports detailing billable hours by project, client, or individual service provider.
• Export cleanly formatted hourly data to accounting systems to simplify creating invoices later.

Combining stellar time tracking with quality invoicing provides a top-notch billing solution for managing accounts receivable the right way.

Get Invoicing Help from the Pros

Creating error-free professional invoices may sound straightforward. But it takes substantial time and diligence to get your invoices right every single time.

Why not hand off the heavy lifting to invoicing experts?

eBillity offers small business owners and solopreneurs the ultimate accounts receivable solution with Time Tracker software.

Built-in features simplify creating, customizing, and sending invoices by automate these key capabilities:

• Time tracking: Accurately log billable hours by project daily via desktop and mobile
• Batch invoicing: Generate multiple invoices across clients in just a few clicks
• Templates: Professionally formatted invoices with your branding
• Payment tracking: Match invoices to payments or deposits in real time
• Reporting: Identify unpaid invoices and other trends impacting cash flow
• Notifications and reminders: Receive alerts for approaching due dates and overdue invoices

With Time Tracker by eBillity managing the invoicing busywork behind the scenes, you can focus entirely on growing your business and taking care of clients. Let accurate invoices ensure on-time payments while strengthening your credibility and reliability.

Start a free trial today to discover how Time Tracker can simplify your billing and invoicing. Join the thousands of entrepreneurs, consultants, agencies, and small business owners who trust Time Tracker to take accounts receivable off their crowded to-do lists.

The post Avoid These 5 Common Invoice Mistakes to Streamline Your Small Business appeared first on eBillity.