Crafting an Effective Business Invoice—The Key Elements

A business invoice is one of the most crucial documents that an enterprise creates, as it directly affects when and on what terms they receive payment from their clients. It also assumes a huge role in business for reasons such as record keeping, business analytics, easy tax filing, and legal protection.

An effective invoice is especially necessary for a small business sending out their first few ones, as it shows the client how professional they are (or are not). Therefore, a small business invoice has to encompass all the elements discussed below.

What is a business invoice?

A business invoice, which is also called a bill or a tab, is a document issued by the seller of a product or service, letting the customer know that payment is due.

         Also Read: How to Choose a Small Business Invoicing Solution: The Complete Guide

What should an invoice look like?

An efficient small business invoice has several features that differentiate it from the ones that get lost in the client’s mail.

  • The word ‘invoice’ and the company’s logo: For easy identification, these two elements are to be prominently displayed on the invoice.
  • Invoice number: Every invoice you send must have a unique ‘invoice number’, ‘reference number’, or ‘purchase order number’ to make it stand out from your other invoices.
  • Date of rendering the service: Adding this element saves time during cataloging.
  • Date of sending the invoice: Emphasizing this detail goes a long way in ensuring on-time payments.
  • Name and contact details of the seller: The client has to be provided with these details, so they can reach you if they need any clarifications.
  • Name and contact details of the customer: Including these details to the invoice is crucial, as they provide it with the necessary legality.
  • Terms and conditions section: Pay extra attention to this section. This part has to include the company’s terms and conditions for the transaction, such as the due date and the penalties for non-compliance. Also, worth noting is the fact that the terms and conditions need to be easily understandable.
  • A brief description of the service provided: Adding a line or two about the product will go a long way in clearing ambiguity about the bill.
  • Cost per unit of product or service rendered: A lot of confusion can be avoided by adding this information to the invoice. This allows the customer to easily determine that the billing amount is accurate.
  • Rate of the tax imposed: Stating this separately provides the client with a clear idea of how the billing amount was arrived at.
  • Total amount due: Another key to a good invoice is the ‘total amount due’ section. This gives the client a way to check if the rates add up and if it coincides with their calculations. Also, another important element to be added in the invoice is the currency in which the amount is mentioned.
  • A personal touch: This is the step that separates a professional business invoice from an amateur one. Take the time to add a personalized note, such as a line thanking the client for the business. It goes a long way in showing the client that you appreciate them.

Hacks to make your life easier

Getting an invoicing software online to manage small business billing needs has been recognized by many as the prudent option. Invoicing software is objectively more convenient and saves money and time. Generating an invoice has also become free with the emergence of market players such as CloudBooks, whose small business invoice template can be found here. So go ahead and send your invoice with confidence—successful and timely payment is one efficient invoice away.

How to Recession-Proof Your Business

Everyone is saying a recession is approaching, with increasing pandemics and social disruption, it definitely is about to hit the global economy. But that doesn’t mean you have to shut shop. There are ways to protect your business in the lows of economic fallout.

A recession doesn’t mean all SMEs go bankrupt. In fact, according to federal data in the US, only 170,000 small businesses out of almost seven million shut shop during the 2008 recession. Although the rest weren’t exactly flourishing, they managed to survive for another ten years. While some of the businesses actually made huge sums of profit others managed to get a better understanding of what to do during a recession. But before we dive into all that, we must understand what an economic recession is. Well, an economic recession is simply defined as two continuous financial quarters of negative economic growth followed by a stock market crash and widespread unemployment, and further followed by a crunch in consumer spending, and bank defaults. And the one that worries SMEs: an increase in bankruptcies. But it is not a norm, and there are ways to withstand another Great Recession.

Here are a few measures that will help you tide over difficult times.

Financial expense tracking and analysis
If you don’t have an expense tracking and financial strategy already in place, its time you get one. The first thing that stops during a recession is your cash flow. If you don’t have an expense tracking system that automatically sums up your expenses on a daily basis, there is a high chance you will miss out on reading the red flags early on. A recession is a gradual and then explosive economic shift. And if you only look at your budget during the tax season, you wouldn’t know how to make good cuts when a financial crisis comes knocking your door. This will also improve your spending habit and make sure you are not wasting money.

Good employees make a great business
The people making your sales on a daily basis are your biggest asset. They are working towards your success, and its best to not ignore them. These very people can make sure your business survives no matter what because they have a vested interest. Hence, you should make sure they are well trained and really a part of your team. The first thing employers start doing when a recession hits is fire employees who don’t contribute, that is silly because you hired such people in the first place. Therefore, you need to have a talented lot as your team, not average people with a degree, but talented and motivated people. The point is, your employees make your business, you should take care of them, and have a recession salary cut agreement with them, so you don’t lose the most valuable asset. And train them effectively so they can sail through the recession with you.

A solid marketing strategy
The most underrated aspect of a good business is the friendships you create. If you have a solid relationship with your client, they are likely to not drop you when times are tough. And the best way to build a relationship is through a good marketing strategy. Get to know your clients, and make them understand your ethics and values as a business through marketing channels. This may mean nothing when you have loads of clients but when your clients are making budget cuts, this will play a very big role in determining what they hold back and what they let go. It is also, therefore, important that you are flexible with payments. Even if a client is willing to retain your service during a recession, they might not be able to pay you upfront. You can set up installment system for the said clients.

                       Also Read: Recession-Busting Tips for Small Businesses

Concluding thoughts
It is almost impossible to make a business 100% recession-proof, but by adopting these measures, you can ensure your business’ survival during tough times.

Important Tips to Protect Your Business Documents

The IBM Cyber Security Report estimates an yearly $2 million loss for small businesses in financial damages due to cyber security attacks. Since your sensitive business documents are at risk, here a few tips to protect your valuable data

Every day you store gigabytes of sensitive business information on your local server.If somebody catches hold of that data,they have the power to completely hijack your business. You need to protect sensitive documents in a way that your organization can access the data without compromising its security. Most organizations are so focused on securing their research and sales information that they forget about invoices –the most vulnerable documentation in the business today.It is not enough to secure it with a password, you need to have a dedicated and secure invoicing software.

With that in mind, here are a few effective ways to keep your business documents safe.

Know your weaknesses
Organizationsthat use multiple tools on a daily basis to manage their cash flow and client details are compromising their cyber security. With no attention to online hygiene, your sensitive business documents are bound to be insecure. If you are still using MS Excel for invoicing, then you are in for a major cyber security attack. However,you can secure your business and client data with an online invoicing software. The technology not only allows you to customize your invoices butgives all the project management tools your organization needs under one roof.For small business owners, invoicing software provides a robust and secure platform through which they can start billing without worrying about the data leaks.

The Cloud protection
Even with secure connections, your data can be leaked to parties of ill-intent, much to the dismay of the clients. You can never trust your local server to be a 100% secure. And that is why you should shift to cloud storage as soon as possible. A good and dedicated cloud storage not only manages your data efficiently without cluttering your local server, but also provides you security against frequent cyber-attacks. Most cloud serviceoffer a dedicated storage with a layered password protection model, which restricts access, and in turn, protects your sensitive documents. Cloud service providers (like CloudBooks) offer a centralized secure channel that use encryption algorithms and run constant data monitoring to keep your sensitive informationsafe. And the best part is, you can access your files virtually anywhere on the planet.
Data backups

It is important to keep data backups for unforeseen times. If you lose your data without maintaining a data backup, you lose your business. Hence, it is highly recommended that you perform periodic backups on your data and maintain a healthy copy at all times. This is obviously a tedious task and performing it periodically can take a toll on your productivity and balance sheet. Online invoicing software use SSL encryption to protect your data in case of a loss or missing link. This is known as an offsite backup where a third party handles your data on a cloud-based server. These services make regular backups and secure the data automatically. You can also link your onsite or local server to offsite database at any given time to load any new or missing files. Not only it is convenient and accessible but also fully secure. Offsite backups offer application level data protection which means your backup cannot be accessed through external indexing, as all your files are private by default.

You can use CloudBooks for all your data security and invoicing needs at a reasonable price and a premium support service. CloudBooks is a fully automated invoicing software specially for SMEs and freelancers looking for documentation support. Learn more at CloudBooks.