Generally, small businesses have several records that are important to their businesses and they range from Invoices, Quotes, Receipts, Client details, and Daily sales and each serves a purpose. In this article, we will be discussing Small Business Invoicing: what it is, what you need to know, and hopefully we go through why you need an invoice process for your business.
First, let’s get intimate with what an invoice is in the next paragraph.
What is Invoicing?
Is there a difference between an “Invoice” and “Invoicing’’?
Well, yes to clarify an invoice is a bill, which is also a commercial document issued by a seller to a buyer relating to a sale transaction and indicating the products, quantities, and agreed-upon prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice and it contains the buyer’s details as well.
The primary purpose of an invoice is to provide a business and its clients/customers with a record of the sale. It demonstrates a client’s obligation to pay for your goods or services.
On the other hand, Invoicing is the process of issuing an invoice to a customer.
Type of Small Business Invoice
While running your business you probably have to create, send and pay a lot of invoices every month. Now, these invoices may differ depending on your industry, clients, products, or services.
In this paragraph, I would be highlighting about 6 types of invoices you may need to get familiar with.
- Pro-forma Invoice: This could also be called “Quotes’’. This is what you send to clients to inform them about what to expect from a purchase or transaction. It is like a preparatory bill before work starts or is finished. It is always subject to change as well based on the validity period included.
- Recurring Invoice: Do you have customers who come back on a subscription basis or based on a monthly fee? Or maybe you have the same set of customers who pay for certain goods or services on a recurring basis, then you may need to leverage this. Recurring invoices charge clients the same amount regularly, for repeated services or goods.
- Commercial Invoice: Do you sell goods or offer services to customers outside your country? This is one you need to check out, it includes extra details needed for shipment across the border such as country of origin, country of destination, shipper, and consignee, weight and volume of product, packaging format, shipment terms, and authorized signature. Invoicing software for small businesses such as Dillali helps you out here when you leverage the multi-currency support which automatically helps you bill your client/customer in foreign currency.
- Timesheet Invoice: This is used by service-based businesses that charge their clients on an hourly basis. As far as formatting goes, a timesheet invoice will usually have these distinctive elements: hourly rate, total hours worked, days and date of the days worked, and administrative fees.
- A payment reminder (Past Due Invoice): No one likes delayed payments, but there are always situations where customers missed payment deadlines. In those instances, the answer is to send a reminder.
- E-Invoice: This refers to all invoices that get issued and delivered electronically. This allows you to get paid faster. You can also leverage invoicing features of digital invoicing platforms to achieve this seamless process.
Benefits of Invoicing for Small Businesses.
There definitely are benefits of leveraging invoices for your business. Let us look at them in the highlights below:
- They keep customers happy and increase brand trust for your business.
- They are professional and give you an edge.
- Legal benefits. They could help you if you are ever in a sticky situation with a customer.
- They are a branding bonus.
- It helps you get paid on time because you can accept online payments after including your preferred payment gateway.
- Invoices keep you organized, you can monitor your income activities as well with this and thus could inform your cash flow decisions.
- Invoices are easier than ever especially if you leverage free invoicing software.
- Time is money, save it with digital invoicing tools
- Send payment reminders on due invoices
Digital vs Manual Invoices.
For me, one major difference will be one is more cost-effective than the other. Digital invoices eliminate waste on purchasing papers. But let’s explain. Manual Invoices involve using spreadsheets, or papers to print invoices (which are done from scratch) to bill customers and they have to fill.
While Digital Invoices are generated via software tools that have invoicing features. They come with already built templates for small businesses to leverage thus creating invoices quickly and instantly.
- Automation is made easy with Digital invoices as opposed to manual.
- You also can track the status of your invoices and follow up on payment without delay
- Digital Invoices get you paid faster.
- Invoicing on the go. This is more welcomed on Digital Invoices because the process is automated as opposed to manual.
- Digital Invoices make transacting between you and customers seamless and thus open up opportunities for your business growth.
How to Create an Invoice:
There are various ways you can create your invoice, do you want to use Excel? An Online Invoice Generator or a software invoicing app? For the software invoicing app, I recommend you use Dillali, as it is 100% free and easy to use.
There are certain details you need to include in your invoice, very important and could disrupt the purpose if missed.
- VAT (Value-added Tax)
- The name of your service, company, or business.
- Business contact number.
- Invoice number.
- Terms and conditions of payment.
- Payment due date.
- Bill to (payer contact information)
- Product or service details.
- Sales tax.
How to create an Invoice in Excel.
- Open Microsoft Excel
- Search for an Invoice Template
- Choose Your Template
- Open the Invoice Template
- Customize the Invoice (include all the necessary information needed)
- Save the Invoice
- Send the Invoice.
How to create an Invoice using an Online Invoice Generator.
The first time you create an invoice, you'll need to add some information to the blank invoice template.
- You can search Google for existing templates on Online Invoice Generators (Search for one that best suits your preference)
- Add your company details in the “From’’ section, including the name, phone number, and address
- Fill out your client’s details in the “For’’ section, including name, email, and address
- Add each line item, along with a description, rate, and quantity
- If applicable, enter the tax rate, type of currency, and discount amount
- Write payment instructions and terms in the Notes section
- Customize your invoice by adding a logo and selecting your brand color.
- Also, do not forget to include your payment details and option as well.
How to create an Invoice on Dillali Small Business Invoicing App.
Now, let me get you familiar with an easier way to prepare and send Invoices in less than 60 seconds.
Dillali is a simple invoicing tool for businesses in Africa, it is user-friendly and has an amazing automated template of format that you can leverage to achieve that easy, professional, and quick invoice without hassle.
- How to start with Dillali? Download the App on the Google Play store or Appstore.
- Create an account and right next to the “Dashboard” you can select the “Income” feature, then select the “Create Invoice” then add your preferred Invoice style, currency, and tax details.
- Proceed to include your business information, invoice number, due date, and details of the client to be billed.
- Next is to select the quantity and price of items or services being sold. Also include the payment information and method for these items.
- Finally, you can preview your invoice for errors and share it with your customer via Whatsapp, Email, or any other preferred platform of your choice.
Super easy! Saves time and promotes efficiency for your business.
Watch how to create your Invoice on the go.
In conclusion, Invoicing is a key record you need as a Business owner. The good thing about starting is you can leverage various tools, templates etc to quicken the process. Do not forget to join top businesses in Africa simplifying their invoicing process with Dillali.