10 Common mistakes to avoid while creating invoice

Posted on 03 May 2016 14:35 in Small Business Hacks
by Harish Rajora

Invoices are required whenever a buyer and a seller deals something. Invoices can also be termed as a written record of the agreement that has been made and all the terms and conditions associated with it. The seller cannot afford any mistakes in them.

* Shimbi MyBilling is now Shimbi Invoice

Invoices are required whenever a buyer and a seller deals something. Invoices can also be termed as a written record of the agreement that has been made and all the terms and conditions associated with it. The seller cannot afford any mistakes in this invoice as a single error can lead to a disaster for the company and can even have a long lasting effect. Here are the 10 common mistakes that you must avoid while creating the invoice


1. Proper etiquette
Proper etiquettes are mandatory in one’s professional as well as personal life. They are one of the deciding factors of success in one’s professional life and play a major part in forming better judgements on those you do not meet and interact with in person. 


A customer watching your invoice can conclude that you are a good professional and a good person by looking at the annotations you give. If you have named him directly without any annotations, that counts as disrespectful. 


Similarly, reminding about the overdue invoices should also be done in a gentle and subtle manner so that the client does not feel offended. 


Proper etiquettes are required whenever you are writing an invoice or reminding overdue or even firing the client. Politeness almost always counts. In addition to strengthening the bond between the customer and the seller, not writing the invoice with proper etiquettes can also prove to be a very grave mistake for the company.


2. Not itemizing the contents
Itemizing refers to stating in the invoice what is charged and how much it is charged. The invoice should contain the item name and its amount charged; this can be followed by different subheadings which would be an efficient way to let the customer have a clear idea of where he has been charged. 


For example, a customer bought a pizza then it should be stated in the invoice details of the VAT, the Service Tax and every other amount charged, if any, to show the customer that he has been charged right. Writing only the total amount to pay leaves the client in a situation where he may start mistrusting the business owner.


3. Check client information
Client information is an essential requirement in the invoice because it states the address of the client where the invoice is required to be delivered. An invoice delivered at the wrong address is the last thing you want. To add to the pile, you might not even be aware of the error and continue to send the overdue invoices to the same (wrong ) address. Such mistakes cannot be afforded and should not happen, and sellers should make it a point to double check and be sure about the delivery address since this may even lead to losses. 


4. Proofreading
Proofreading is reading your invoice(s) again and again to get rid of possible errors. This mistake mainly happens when the seller is not using the automated systems that come for generating invoices like MyBilling developed by ShimBi Labs. 


Invoices, when generated manually can pave the way for multiple errors and these errors, could sometimes be very demeaning for the firm’s reputation and workflow. 


Missing any key value or condition can ruin the deal and let the customer take advantage of the same. The tendency to skip proofreading is a common mistake and this should/can be avoided by giving more time to each invoice than is usually the case.


5. Not mentioning the due dates
Due dates are the dates by which the customer has to pay the amount mentioned in the invoice, failure of which would lead to penalties payable by the customer. 


But what happens if the seller forgets to mention the due date on the invoice? He may end up sending emails following up the dues, but the customer might ignore that. As a consequence, the seller will have to extend the due date by many days, and this would create a barrier in the cash flow process. Every seller should, therefore, keep in mind the due date, especially whether or not he has mentioned it in the invoice clearly.


6. Adding fees, that was undiscussed.
A customer cannot bear to see charged with something that was not discussed at the time of the deal. Adding extra fees of something that was not discussed with the customer will increase the total amount, and this will surely receive an outrageous result. This would result in effect tamper the smooth relation between the customer and the seller and ultimately the loss would be the seller’s to grieve. Therefore, no extra fees should be imposed that has not been priorly discussed with the customer at the time of the deal.


7. Due date should be visible
While forgetting to specify the due date is erroneous enough, what can be worse is to mention the same in an undecipherable font or one that easily slips the eye. Due dates that are not mentioned in bold and readable font size will be unintentionally skipped by the client. 


The customer usually does not have time to have a look on the invoice for more than 5 minutes. He looks for the basic details such as money charged, how much it is charged etc. The seller has to make the customer catch the due date to ensure smooth flow of cash and this can be done by mentioning the due dates in big, bold letters since the due date is a very important part of the invoice. Using MyBilling software will destroy the chances of this mistake.  


8. Forgetting to mention the payment options
This can be a big blunder that can occur in an invoice. Not mentioning the payment methods implies that the customer will think that he has to pay you personally with cash in hand. This will surely take time and will leave you in a black hole where every customer is paying near to the due date. 


This mistake cannot be afforded by any seller and should, therefore, be the first thing to be  checked before sending the invoice. Mentioning multiple payment methods such as Paypal integration or credit/debit card will comfort the customer, and he can pay the money from his office or home faster and efficiently. 


This way every customer will pay as soon as he gets time because it will take much less time than handing over money in person.


9. Mention important terms and conditions in readable fonts
Terms and conditions are normally more in number and takes the full page even if written in small fonts. This is the reason why that seller prefers small fonts for writing them. Nevertheless, sellers should make it a point to mention those few terms and conditions which are very important in larger and markedly visible fonts lest it turn to be a cause or sour argument in future. 


For example, mentioning that payment that is delayed by more than 5 days to due date can result in the penalty. If written in unreadable font size then this will be a point of argument because the client can claim that he did not read the terms as they were too small to read. Therefore, the important terms and conditions should be bold and in a larger font than the other ones since they serve a larger purpose.


10 Invoices should reflect brand
Invoices are the identity of a company. They should and must always reflect brand and professionalism. This can be done by printing logo of the company on the invoice.


A casual invoice is not welcomed with open arms in the corporate world. When you are a part of the corporate world, you must try to respect the rules of the same. Brand and professionalism show how sincere and disciplined you are. This is bound to attract a better number of clients for the company.


Mistakes can be small and big, but compensation is needed for every one of them. If these mistakes are not committed, then they can be proved to be blessing in this so called "highly competitive" world. It will make your firm prosper and grow at a fast pace. Keep in mind the points discussed in the blog; they will prove to be a game-changer at one point or the other. 


Share your experiences or any point we missed, which still hold important while writing invoice in comment section bellow.


About the author

Harish Rajora  
I love writing and reading

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