When you run a business as an independent contractor, you have an extra responsibility to monitor your billings. An essential skill that helps you do this is knowing how to send an invoice to your clients.
An absence of this will lead to a build-up of debts but may also put you out of business and run you into debt. One easy way to navigate this is to use an invoice app. With this, you can cut down on time spent chasing clients around and focus on providing excellent service.
This article will bring you up to speed on creating an invoice as a contractor.
Why should you use an invoice as a contractor?
1. Excellent for legal purposes
Having legal issues as an independent contractor is no walk in the park, but it is easier to deal with if you have an invoice. Invoices are usually issued to keep track of and receive payment from the customer; however, they also help to shield you in case of a dispute.
As a business owner, doing everything to avoid this situation is your goal; however, there are instances when a client refuses to pay even after several reminders. Having an invoice serves as legal proof that there was a financial agreement and can be evidence if you decide to escalate the dispute further.
2. Helps keeps things organized
Maintaining an organized record of invoices issued is vital. This helps you track all payments, pending or otherwise; this also assists you in evaluating your stand financially in the long run.
Also, because invoices contain financial details between you and your client, you can effortlessly search out the information you need on your clients when your invoices are correctly filed.
3. Keeps things professional
A professional invoice designed by one of the best invoicing software for contractors significantly impacts client experience and helps keep things professional. You might not realize this, but when a customer is issued an invoice, you portray your business as one that runs on efficient processes. This, in turn, builds trust and client retention.
Because an invoice is a touch point with a client, it creates an avenue for you to provide an exceptional experience. From start to finish, an excellent customer journey must be maintained.
4. Showcasing your brand
An invoice is an excellent way to start. You can control your brand’s perception and make lasting first impressions with an invoice. When designing your invoice, be sure to check that the design and tone should reflect how you want your clients to perceive your business. Ensure the invoice is good enough so your clients can have a second look.
You’ll also find that using invoices is beneficial for a contractor, and it is essential to make this task seamless. Switching to an online invoicing system is best for most businesses, and using an app is more efficient than most offline invoicing systems.
Why should you use an invoice app?
1. Create multiple invoices
As an independent contractor, one significant thing an invoice app will do for you is you can send numerous invoices simultaneously. It also helps with record purposes as you can have all the records of all the invoices sent earlier to your clients for future reference.
In addition, you can easily include services or items you usually offer the clients in your inventory. This option makes it quick and easy to add the right thing to the invoice, which saves the time and energy you would have used if it was a manual calculation.
2. Helps with the organization
Due to the demanding nature of businesses, there are times when you might miss an unpaid invoice or forget to send out an invoice. It might be simple to send an email and ask a crucial question, but this makes your business look less professional. Using an invoicing app could help with periodic reminders and automatically generate invoices when assigned.
3. Provide a professional look
An invoicing app provides a professional look to the created invoices. An invoice with a good layout can be easily understood and read by the client, which boosts the client’s confidence and increases the chances of customer retention.
An invoice app would provide you with so much which just a few clicks. It would save time for the business and make it easier for you and your client.
How can you send an invoice as a contractor?
1. Choose a custom-designed invoice
When using templates for your invoice, you may sometimes need to remember to adjust things to suit your brand. However, custom designing your invoice will help ensure you maintain what your brand has always been known for.
Custom-designing your invoice would not only improve the image of your business, but it will also ensure your invoice stands out. Additionally, it will help your brand or business maintain top-of-mind awareness and better brand positioning.
2. Include essential details in the invoice
Now that the custom design of the invoice has been sorted, ensure you have double-checked all the information on the invoice is right. Include the word INVOICE or TAX INVOICE on your invoice in large font size, your business details, your business logo for easy identification, the client’s contact details, Invoice number, payment terms and method of payment, Invoice date, details of the service or products, and the total amount due.
3. Write An Invoice Email
Having an invoice email template would save you from rewriting the identical mail over again. Having a template also helps ensures your emails and brand is consistent. When writing your invoice email, it is best to make it personalized, keep it straightforward, and ensure the subject stands out.
Independent Contractor invoicing mistakes to avoid when you use an invoice app
While using an invoice app can be very easy, it’s easy to get carried away when using the app; you can make mistakes while enjoying the simplicity. Here are a few mistakes to avoid:
1. Sending Your Invoice at a later time
Your invoice app can make invoicing easy, and it should always be timely invoices. Many invoicing apps offer a timing service that allows you to schedule an invoice to be sent later. This works great if you have clients you invoice at a time or carry out multiple transactions.
2. Forgetting due dates
If you use a template on your invoice app, you may edit the due date section and leave it out. Most times, this step needs to be completed. With due dates, you can hold your client accountable for sending their payment by a specific date. Input this detail before sending your invoice, and include what happens if the payment due date is defaulted.
3. Not Including Terms
Including terms in your invoice is one way to ensure that your invoice can stand as a legal document. However, because many invoice apps will not automatically generate this because terms should be peculiar to your business, you may skip including it. Be sure to include words on your invoice that ensure that you can request your payment, get paid in due time, and will help protect you and your client.
4. Not following up on invoices
Once an invoice is sent out to a customer, the job isn’t done. There is an additional need to follow up on the invoice sent to ensure you get your payment. Following up on your invoice is excellent business culture and helps keep your payment at the top of the minds of your clients.
5. Not having a ready invoice
Because you can easily spin up an invoice from your invoice template, you may continue running in turbo mode and create an invoice only a few minutes before the invoice is sent. This is, however, bad for your business. Please make your invoice in advance to ensure that all details have been corrected and that no important point is left out. Start with a general template and edit it quickly.
Having ready invoices also ensures you can avoid sending the wrong invoice to a customer. This can make your business appear more put together and on top of the game.
Use client-friendly language
Using words your client doesn’t understand on your invoice may give them the impression that they’re about to be cheated. As much as possible, try to rid your invoice of any jargon your client may not understand. Be sure to use only terms your customers can understand and explain every detail you need to.
Do invoice apps create legally binding invoices between contractors and customers?
Invoicing is a crucial accounting practice for every business; despite this importance, invoices alone are not legally binding documents between the client and the company. This is said because an invoice can easily be tampered with, and in addition to this, there is no evidence or proof that states that both the client and the company have consented to the terms.
However, some invoicing apps exist that are validated and verified and can be considered a vital source of evidence for a legal dispute but are not legally binding.
