2. THE RIGHT FORMAT
A positive step to getting paid is to have robust Terms and Conditions and invoicing techniques that give your business the best chance of not having to deal with bad payers on a regular basis.
Terms and Conditions
One of the best practices to adopt when you’ve agreed to work with a client is to send over your Terms and Conditions for their approval. This doesn't need to be a long document. In fact, the more succinct the better, as you're more likely to get it approved quicker. Your Terms and Conditions should set out what they expect from you, and
- Notice period
- Service level agreements
- When and how you invoice, when an invoice is expected to be paid, how an invoice will be paid, and what happens when a bill is not paid
- Revision limits – to prevent repeated demands for changes to work (and help focus the client)
Regardless of size, invoicing is an essential part of any business and there is a basic format that you should stick to. This document is important for both parties because the seller needs to keep a copy as a record of their sales, and the client needs to keep a copy as a record of their purchase. Even though the invoice structure is industry dependent, there are some general elements that should be followed:
- A professional header that states ‘invoice’ and contains your contact details, logo and GST number
- Invoice number – always use a sequential order
- Date prepared – the day the project was completed and/or the invoice was sent out
- Payment due date – either 30-day, 45-day or 60-day timeframe
- Preferred payment option – the method you prefer to receive payment
The main details of your invoice to include a breakdown of services that should contain:
- Services – a detailed description of the work or service you carried out or goods supplied
- Date – the date the service was performed or when a product was purchased
- Quantity – either how many hours you worked or how many items you sold
- Rate – the price you charge for your goods or services
- Hours – applies if you’re working hourly
- Subtotal – the total amount you are charging for goods or services, including tax or additional fees
Below the total, detail any additional terms and conditions such as your returns policy, how many days the client has to pay before incurring a late fee and any discounts for early payment.
Adding terms like “Thank you for your business” and “We appreciate your timely payment” can also increase your chances of getting paid.