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Billing and Invoicing etiquette for Small Business Owners

Updated on :  

08 min read.

Just like a resume or biodata which represents you. Various business documents represent the face of business.

You carry these documents, your employees, or even your customers.

One such document called invoice/ bill is always created and circulated throughout your business.

One must follow invoice and billing etiquette to maintain professional relations with clients. This will minimise concerns within your customers and maximise revenue for the company. These are listed below:

1. Use of software

Days have gone by where people used to maintain and carry invoice books, stamp pads to make invoices immediately to their customers. The software eliminates the use of many stationery items. It also provides consistency in the format of the invoice. This helps a customer recognise your company’s invoice. The software maintains all the invoices created and lets you concentrate on your business.

2. Discussion of terms and services

Businesses share a service memorandum or purchase order specifying the goods and services to be delivered. Ensuring that all goods and services are covered will not bring any surprise element for the customer when making the invoice. There may be adverse consequences such as avoidance or delay in payment if any surprise elements are introduced.

3. Be with your terms and conditions

Stick to the predefined terms and conditions for all invoices, i.e. consistent terms across all the invoices. One must avoid frequent changes in terms and conditions as they may confuse your customers. Whenever there is a change in your terms and conditions, a prior intimation from your end may reduce the confusion and hassle of your customers.

4. Contact and statutory details

Your invoice must always include business contact details. This reduces hassles for your customers (existing or potential) to reach out conveniently. Your business contact details include the address of your place of business, mobile number, landline number, email address and company’s website. Including statutory information (for example, GST, PAN, company identification number, etc.) provides more ease to your customer.

5. Various payment options

Primarily businesses do accept cash or cheque for settlement of dues. The introduction of online payment through UPI or direct payment through your business website provides a lot of convenience to the customer. So make sure every payment option runs smoothly and highlights on your websites and invoices. If there are any changes in payment options, a prior intimation to your customer is a must.

6. Advance payment for long-tenure projects

It is always rational and prudent to ask for an upfront payment from your customers, especially if the projects are long-term or high-value projects. This helps you manage your working capital smoothly and is also sufficient to cover the ongoing expenses of the project. This also reduces the dependency on funds from other sources. The advance received also shows a commitment from your customer, and he would be less reluctant to disown the project later.

7. Follow-up

There might be cases where your customer may not pay your dues on time. It is also your responsibility to follow up immediately. Certain software does send an automatic reminder (SMS or email) but reaching out personally may fasten the process. Also, certain customers may not be tech-savvy, so personal follow up is necessary in those cases.

8. Delivery of invoice

Delivery of invoices is an essential part without which the customer won’t initiate the payment process. You can either deliver the invoice by hand, courier, mail, or even messaging applications. For customers who aren’t tech-savvy, hand-delivering or by courier should be used as means to deliver an invoice.

So these are a few etiquettes that one should incorporate in their invoicing and billing process. An automated process does ensure timely delivery of invoices and reminders, but in some cases, a personal follow-up or delivery is required.