9 Common Invoicing Mistakes and How to Fix Them
Every day, invoices are created and sent, to customers, from suppliers.
It might seem to be an easy, routine job. In reality, it is not always the case. And self-employed people tend to repeat some mistakes.
At Accountable, we would like to protect you, our self-employed hero, from making these mistakes. So we created a list of mistakes that you can avoid and an explanation on how to do things the right way.
The best day to send your invoices? The day you finished your work for your client!
If this is not really your thing and you’re going from one project to another, set time aside in your schedule to send your invoices. The end of each week might be a good timeslot.
Whatever works best for you, don’t forget that according to the law you have to send an invoice at the latest on the 15th of the month (link in Dutch, also available and French) following the month on which the taxes become due on the entire invoice or part of the invoice.
By sending your invoices on time, you’re also increasing the chances of being paid quickly. You also have a lesser chance of forgetting to send an invoice. This might sound weird but you wouldn’t be the first self-employed person that ends up going bankrupt as a result of forgetting to invoice.
If you use Accountable, you can easily create and send invoices, from your couch, from the tram, from wherever you and your mobile phone are. So there are no reasons to postpone sending your invoices anymore.
Giving up on unpaid invoices
You’ve done the work, you’ve sent your invoice but your customer is not paying you. It happens: the customer might forget or lose the invoice, or maybe… he is just a bad payer.
It is up to you to send a reminder as soon as the invoice expires. First in a friendly manner, then a bit more strict. You can find all our specific tips on how to deal with defaulters here.
You can find which invoices are unpaid by checking your bank account and seeing which invoices did not arrive yet. With Accountable you will automatically get a notification when the invoice due date has expired and the invoice is not paid yet.
Forgetting a crucial element on your invoice
Every invoice you send needs to include the following ten elements. You can use this checklist before sending your invoice to make sure that everything is included:
- Your invoices are sequenced; make sure that your invoice has the correct sequence number
- Your data; the exact name of your company, the address, the company registration number, and the VAT-number
- The data of your customer; name address and VAT number
- The date on which you sent the invoice and the date on which your product or service was delivered
- A description of the delivered product or service
- The price per unit and the number of units (could also be hours)
- The total amount without VAT
- The correct VAT percentage that is relevant for your activity (6, 12 or 21%)
- In case your exempt from VAT, you have to put the legal reasons why you’re exempt from VAT on the invoice by referencing the relevant European directive or national provision.
- The total amount of money to be paid, including VAT
When you use Accountable you can only send the invoice when all fields are filled in. In other words, we designed the app in such a way that you can only send invoices when they are fully compliant with the law.
Not putting a description of the delivered product or service
Your customers are just like you, they like to know what they are paying for. Make their life easier by explaining to them what the different amounts on your invoice mean, what kind of work you did for them, was it something you did or a product that is calculated per item, and if so how many items, etc.
If your customer understands better what the total amount on the invoice is for, he/she is more likely to pay your invoice fast.
When you create an invoice using Accounting, the button “add item” gives you a clear overview of the items you need for that part of your invoice, e.g. item description, the unit costs, quantity, and VAT rate.
Adding unexpected costs
It is sometimes nice to be surprised, but not always. For example, unexpected and unexplained costs on an invoice are not a good surprise. You would not want to be in that situation, your customer neither.
Try to avoid an unexpected surge in price in the invoice. Explain clearly, from the start of the project, what are the different aspects of your work. You will be paid fairly for the work accomplished and your client will not feel trapped when receiving your invoice.
Sending your invoice to the wrong person
As a self-employed, you sometimes work with a person that is part of a larger organization or company.
For example, you are a freelance journalist and you deliver your paper to the editor of the news. She/he approves your work, but you can be pretty sure that she/he is not responsible for processing the invoice.
Make sure that you know who is responsible for paying the invoices and send your invoice to this person. If this is the first time you work with that company, be sure to get this information as quickly as possible when you start working together.
Sending your invoice to the wrong department, person or place can delay the payment significantly. It might end up on a pile that is never checked or even thrown away. It also doesn’t really look that professional if you send it to the wrong person.
In short, make sure to know upfront where and to whom you need to send your invoices. Do not forget to ask for their name and email address!
Within Accountable, you can send your invoices in two swipes, on the go, and personalize your email to your client.
Saving your invoices somewhere else than in the cloud
Imagine that your computer – yes, the one that stores all your invoices – crashes; all of your invoices that you have to keep with you for seven years are gone from one day to the next.
A doom scenario, right?
Fortunately, you can save yourself from a nightmare like this with just one click. Google Drive, DropBox, Accountable are all easy and legal ways to save your invoices forever and ever.
Use a service like this and be sure you can sleep safely while all of your invoices are in a secure spot.
Do you send your invoices without reading them through?
Don’t do it!
In the least terrible scenario, you might leave in one or two grammatical errors, use a wrong font, leave out some space, forgot to add your company template – any of these mistakes already make you look less professional. But what if you make a calculation error and your customer ends up paying less?
Is this the best way to build a trustful relationship with your customer? To sell your brand as one that delivers a professional job without mistakes?
We’re not sure.
So make sure to always use the same model for creating your invoices, in which key things (like your address and logo, etc.) are already prefilled. Then read over a final time before sending your invoice.
This will greatly enhance your relationship with your invoices and your customer!
Forgetting to put some attention on your brand
Your customer will read your invoices, read them again, save them, etc. That is not something that can be said from your average paper landing in the office.
Take this to your advantage and let your customer get to know your brand a bit better every time he or she reads your invoice. Add your logo, add your own colors and stick to it. Every time your customer sees your invoice, he or she will have a clear mental image of your company.
In short, make use of your invoices not to get paid but also to stay top of mind with your customers.
We’re living in 2019, sending sloppy invoices created in Word or Excel should be a thing of the past.
Within Accountable you have the option to add your own logo and colors to the invoices you’re sending. You can personalize your invoices, straight from the app.
Want to try it out? Head over to the app store and start using this nifty feature.
Do you know any other mistakes people are making on their invoices and how you can avoid them? Let us know in a comment below or drop us an email at firstname.lastname@example.org!