nathan—You are absolutely correct about the SSN on invoices, and I am sending an e-mail to the editor asking that small part be fixed. It should be noted that if you do not have an EIN, a SSN will still be required for a W-2.
I also understand that this article is based on the “American system” of business. I am writing from my experience, and would welcome further articles with a more international theme. But barring a few acronyms, I feel many points remain valid in any country or culture.
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eric scheid
Here in the United States of Australia we have other requirements, mandated by the Tax Office. If you’re in Oz, contact them and get their handy booklet.
I take it that the EIN is the equivalent of our ABN, just to muddy the water some.
I’ve found keeping invoices in Filemaker Pro pretty darn good, and with Filemaker the layouts of the page can be very prettily designed. I’ve got mine to auto-generate lists of outstanding invoices, lists of invoices due to recurr, and so on. Generating the invoice and sending it via email is now a one-click trick for me.
Early on in my career as an entrepeneur, I may have lost an important client due to invoices. After not having received a payment for one and a half month (what’s normal differs per country), I sent them my standard reminder.
It turned out they had actually tried to pay me, on time no less, but that I had printed the wrong bank account number (preferred methods of payment also differ per country), and that the money had bounced. I made a bad impression with that bounce, but probably more so with my uninformed reminder.
Everybody can make mistakes, so now I phone late customers. I tell them that I appreciated the cooperation, and ask them if they received the bill OK. This way, any potential problems can be resolved by polite dialog.
(It has happened once that a client started shouting at me when I did this, but it turned out later he never had any intention of paying me anyway.)
(Also, but this is hearsay for me, there seem to be companies whose policy it is to always pay late, and who will tell you so after you delivered your service/product. I can imagine that this might make the phone conversation a little awkward.)
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Frank
Translated into Canadian:
- EIN = GST registration number
- SSN = Social Insurance Number (SIN)
- W-2 = A form which reports an employee’s annual wages and the amount of taxes withheld from his or her paycheck. I think it’s a T-2 form, but I could be pulling that number from my ass.
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Sam Oldak
After looking at iWork, I was wondering if there was anything similar for the pc. I have used microsoft money, but found it is very bad at creating invoices, especially if you are self-employed.
All of my clients pay me on time or at least let me know payment is going to be delayed. If you have become ‘friends’ (I use the word very loosely) with your clients they will feel obligated to pay you on time.
Try joking with them or getting just a little personal. I find sending links to pictures of a recent addition to my home helps out greatly. Also giving them heads up when you are leaving town for a couple of days is appreciated.
This only works if you are a small business (or single person shop) working with another small business.
This might be of interested to some. Written a while ago now and getting a bit old it’s a quick example of using XML to create PDF invoices with Formatting Objects. Saved me a heap of time.
http://www.zype.co.nz/resources/tutorials/invoice/
Thanks for an excellent article. What we may want to add is that a lot of these points apply to all business communication (contracts, proposals, reminders, etc.). We find that the easier you make it for the recipient to review, process, and store a communication, the more efficient it is for everyone. The question we like to ask before we send out a communication is “If I received this communication will I be able to review, process, and store it without making a phone call?”
I’ve been using this software since the 2003 version, and just upgraded from 2004 to 2005. The invoice customizer kind of sucked balls through 2004, but I’ll post back with 2005’s, since a lot of the rest of the program is very much improved.
I prefer to use a program that will track invoice numbers, customer IDs, etc. for me, since other options don’t really scale well as your business begins to grow.
The company I work for uses OCR to convert their suppliers invoices into digital form. Not surprisingly alot of companies dont know the value of having clear and concise invoices. I know for a fact that companies that somewhat follow the guidelines you have stated in your article get less hassle and paid quickly.
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Jonas C Otter
On a semi-unrelated point, in the US, is there a benefit to being either a freelancer or set up as one’s own business (s-corp etc..)? I have been freelancing for several years, and really don’t know what the heck i’m doing in terms of the biz end of things.
Are there any good tutorials or reference sites out there that I might find helpful?
Studiometry is a great app for invoicing and time management with loads of features and very responsive author.
What’s really cool is that you can export your invoices as an XML file, and then import the XML into an InDesign template. All the number crunching and admin is automated by Studiometry and the end result is a beautifully designed InDesign document – check it out!
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John
I think it’s worth highlighting that this article is specifically aimed at Americans.
Whilst an interesting read, I fail to see how outlining American business practises is going to help the rest of us. There’s no mention of referencing any Purchase Orders you have (I have no idea if you have them in the US), I for one wouldn’t start any work without one, and it’s far more important than laying out your invoice correctly, as it’s your only guarantee of payment.
Anyway, a couple of general points
Under contents:
No mention of any local sales tax. Value Added Tax (VAT) in the UK must be broken down to the client, and the rate of tax must be stated if you are a VAT registered business, for example. I’d imagine this is true in other countries.
Under timing:
“No one wants to pay for unfinished work.”
Yes, they do.
Especially if they want to get the work paid for in a particular month or tax year because of budgeting.
I suggest UK folk take a look at this article, which includes a nice example of a UK style invoice.
I loved your articles on Invoices. I used to run into so many pitfalls when trying to create invoices for my clients. Most of the time, the biggest issue was that I hated how to invoice looked.
I don’t mean to sound like a cheap promoter, but I built some PHP / MySQL software to handle all of my invoicing, it’s called TypicalInvoice.
I was bought by another company who is now selling it, but the software is still very helpful in my opinion.
You can check it out at http://www.typicalgeek.com/demo/tiv2/ or you can e-mail me and I’ll send you a free trial copy. :)
add your legal fine print to the bottom of every invoice (e.g. terms for late payment, recovery of legal expenses in case of non payment, etc…) It can save your ass in court.
I never thought about how some people might think it’s more professional to mail an invoice. I’ve just been sending invoices through email using QuickBooks. I might start sending invoices through the mail for Web Design / Programming and then still use email for reocurring web hosting invoices.
Not many business owners think much about the invoice process and it is about high time that changes. In the SMB space it is all about cash flow so your tips are awesome! Now if I could trackback to this..
I use NetOffice for project management and GNUcash for accounting billing and invoicing. Still trying to get my invoices to look nicer in GNUcash.
Both are great apps and you can’t beat the collaboration aspects of an online project management system where clients can log in and see the status of their projects, upload and download files, and approve designs.
For Mac users GNUcash is available thru fink http://fink.sourceforge.net
http://www.gnucash.org/
http://netoffice.sourceforge.net
Brand new to iWork. I’ve been using MYOB software for a couple years and have been fairly happy with it. However, it has some limitations to custom invoice building and is also far more complex than what I need to operate for my sole-proprietor design firm.
With iWork, I have a singular issue I can’t get around. I am using the server addition with several clients loaded on freelancer machines. However, there doesn’t seem to be a way of building a custom invoice on the server side, and if I attempt to do so on the client side I get an error message that says the iWork client can’t find the “client ” in the address book because it’s on the server. How then can I build custom invoice templates if I can’t access either address book?
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Jim Ferguson
We’ve been e-mailing PDF invoices to our customers who order our software by purchase order (typically universities and K12, but also corporate customers). I used to mail them paper copies.
In my experience, e-mailing has been just as effective as paper. We’ve gotten paid from all our PDF invoices and in a timely manner. Maybe we just have great customers.
I agree with the comment about stale corporate invoices generated by Quickbooks (that’s what we use). I wish our invoices were visually snazzier. I don’t know that it would make any difference with respect to reputation or professionalism, though. In our case, the customer who orders our product is generally not the person who has to look at the invoice and pay it.
I just discovered a small software that really helps improve the design of my invoices using Quickbooks. In fact it will help you create PDF files from every program that includes print command.
The software is called DocuCom PDF Driver. More info here.
From Quickbooks (or any accounting package) you create an invoice template without any “fancy” things like border, etc. You just print the bare data (adresses, memo, terms, services, totals, etc) with the nicest font that you can from your accounting package. When you are done, you print with the PDF driver which allows you to set another PDF as a background or as an overlay. You could design this in Photoshop for example (then print it to PDF!).
Great for producing invoices! Once the PDF is generated you can print/mail it or email it.
This is something I have been thinking about doing for sometime (really incoperating my identity into my invoices) as well as just a great article on inside practices.
36 Reader Comments
Back to the ArticleKevin
nathan—You are absolutely correct about the SSN on invoices, and I am sending an e-mail to the editor asking that small part be fixed. It should be noted that if you do not have an EIN, a SSN will still be required for a W-2.
I also understand that this article is based on the “American system” of business. I am writing from my experience, and would welcome further articles with a more international theme. But barring a few acronyms, I feel many points remain valid in any country or culture.
Thanks for the great feedback so far.
Amit
Gr8 Article, Keep up the Good work :-)
eric scheid
Here in the United States of Australia we have other requirements, mandated by the Tax Office. If you’re in Oz, contact them and get their handy booklet.
I take it that the EIN is the equivalent of our ABN, just to muddy the water some.
I’ve found keeping invoices in Filemaker Pro pretty darn good, and with Filemaker the layouts of the page can be very prettily designed. I’ve got mine to auto-generate lists of outstanding invoices, lists of invoices due to recurr, and so on. Generating the invoice and sending it via email is now a one-click trick for me.
Branko Collin
Early on in my career as an entrepeneur, I may have lost an important client due to invoices. After not having received a payment for one and a half month (what’s normal differs per country), I sent them my standard reminder.
It turned out they had actually tried to pay me, on time no less, but that I had printed the wrong bank account number (preferred methods of payment also differ per country), and that the money had bounced. I made a bad impression with that bounce, but probably more so with my uninformed reminder.
Everybody can make mistakes, so now I phone late customers. I tell them that I appreciated the cooperation, and ask them if they received the bill OK. This way, any potential problems can be resolved by polite dialog.
(It has happened once that a client started shouting at me when I did this, but it turned out later he never had any intention of paying me anyway.)
(Also, but this is hearsay for me, there seem to be companies whose policy it is to always pay late, and who will tell you so after you delivered your service/product. I can imagine that this might make the phone conversation a little awkward.)
Frank
Translated into Canadian:
- EIN = GST registration number
- SSN = Social Insurance Number (SIN)
- W-2 = A form which reports an employee’s annual wages and the amount of taxes withheld from his or her paycheck. I think it’s a T-2 form, but I could be pulling that number from my ass.
Sam Oldak
After looking at iWork, I was wondering if there was anything similar for the pc. I have used microsoft money, but found it is very bad at creating invoices, especially if you are self-employed.
Urban Clothing - FOS
All of my clients pay me on time or at least let me know payment is going to be delayed. If you have become ‘friends’ (I use the word very loosely) with your clients they will feel obligated to pay you on time.
Try joking with them or getting just a little personal. I find sending links to pictures of a recent addition to my home helps out greatly. Also giving them heads up when you are leaving town for a couple of days is appreciated.
This only works if you are a small business (or single person shop) working with another small business.
marko
Like everyone else… great article. I was also wondering about PC software…
Josh
This might be of interested to some. Written a while ago now and getting a bit old it’s a quick example of using XML to create PDF invoices with Formatting Objects. Saved me a heap of time.
http://www.zype.co.nz/resources/tutorials/invoice/
iProceed.com
Thanks for an excellent article. What we may want to add is that a lot of these points apply to all business communication (contracts, proposals, reminders, etc.). We find that the easier you make it for the recipient to review, process, and store a communication, the more efficient it is for everyone. The question we like to ask before we send out a communication is “If I received this communication will I be able to review, process, and store it without making a phone call?”
Jeremy - exibus industries
I’ve been using this software since the 2003 version, and just upgraded from 2004 to 2005. The invoice customizer kind of sucked balls through 2004, but I’ll post back with 2005’s, since a lot of the rest of the program is very much improved.
I prefer to use a program that will track invoice numbers, customer IDs, etc. for me, since other options don’t really scale well as your business begins to grow.
Jeremy - exibus industries
Nope, still sucks.
Emmanuel Ay
The company I work for uses OCR to convert their suppliers invoices into digital form. Not surprisingly alot of companies dont know the value of having clear and concise invoices. I know for a fact that companies that somewhat follow the guidelines you have stated in your article get less hassle and paid quickly.
Jonas C Otter
On a semi-unrelated point, in the US, is there a benefit to being either a freelancer or set up as one’s own business (s-corp etc..)? I have been freelancing for several years, and really don’t know what the heck i’m doing in terms of the biz end of things.
Are there any good tutorials or reference sites out there that I might find helpful?
harry Jones
Studiometry is a great app for invoicing and time management with loads of features and very responsive author.
What’s really cool is that you can export your invoices as an XML file, and then import the XML into an InDesign template. All the number crunching and admin is automated by Studiometry and the end result is a beautifully designed InDesign document – check it out!
John
I think it’s worth highlighting that this article is specifically aimed at Americans.
Whilst an interesting read, I fail to see how outlining American business practises is going to help the rest of us. There’s no mention of referencing any Purchase Orders you have (I have no idea if you have them in the US), I for one wouldn’t start any work without one, and it’s far more important than laying out your invoice correctly, as it’s your only guarantee of payment.
Anyway, a couple of general points
Under contents:
No mention of any local sales tax. Value Added Tax (VAT) in the UK must be broken down to the client, and the rate of tax must be stated if you are a VAT registered business, for example. I’d imagine this is true in other countries.
Under timing:
“No one wants to pay for unfinished work.”
Yes, they do.
Especially if they want to get the work paid for in a particular month or tax year because of budgeting.
I suggest UK folk take a look at this article, which includes a nice example of a UK style invoice.
http://www.fastlinksolutions.co.uk/invoicin.htm
Jeremy Hubert
I loved your articles on Invoices. I used to run into so many pitfalls when trying to create invoices for my clients. Most of the time, the biggest issue was that I hated how to invoice looked.
I don’t mean to sound like a cheap promoter, but I built some PHP / MySQL software to handle all of my invoicing, it’s called TypicalInvoice.
I was bought by another company who is now selling it, but the software is still very helpful in my opinion.
You can check it out at http://www.typicalgeek.com/demo/tiv2/ or you can e-mail me and I’ll send you a free trial copy. :)
Keep up the good articles!
Jeremy
Mark
add your legal fine print to the bottom of every invoice (e.g. terms for late payment, recovery of legal expenses in case of non payment, etc…) It can save your ass in court.
Brent
I never thought about how some people might think it’s more professional to mail an invoice. I’ve just been sending invoices through email using QuickBooks. I might start sending invoices through the mail for Web Design / Programming and then still use email for reocurring web hosting invoices.
Anne Stanton
Not many business owners think much about the invoice process and it is about high time that changes. In the SMB space it is all about cash flow so your tips are awesome! Now if I could trackback to this..
Anne
Gary Ritchie
I use NetOffice for project management and GNUcash for accounting billing and invoicing. Still trying to get my invoices to look nicer in GNUcash.
Both are great apps and you can’t beat the collaboration aspects of an online project management system where clients can log in and see the status of their projects, upload and download files, and approve designs.
For Mac users GNUcash is available thru fink http://fink.sourceforge.net
http://www.gnucash.org/
http://netoffice.sourceforge.net
diseño web
congratulations for the article.
Alexander
Brand new to iWork. I’ve been using MYOB software for a couple years and have been fairly happy with it. However, it has some limitations to custom invoice building and is also far more complex than what I need to operate for my sole-proprietor design firm.
With iWork, I have a singular issue I can’t get around. I am using the server addition with several clients loaded on freelancer machines. However, there doesn’t seem to be a way of building a custom invoice on the server side, and if I attempt to do so on the client side I get an error message that says the iWork client can’t find the “client ” in the address book because it’s on the server. How then can I build custom invoice templates if I can’t access either address book?
thanks for any help.
Jim Ferguson
We’ve been e-mailing PDF invoices to our customers who order our software by purchase order (typically universities and K12, but also corporate customers). I used to mail them paper copies.
In my experience, e-mailing has been just as effective as paper. We’ve gotten paid from all our PDF invoices and in a timely manner. Maybe we just have great customers.
I agree with the comment about stale corporate invoices generated by Quickbooks (that’s what we use). I wish our invoices were visually snazzier. I don’t know that it would make any difference with respect to reputation or professionalism, though. In our case, the customer who orders our product is generally not the person who has to look at the invoice and pay it.
Jim
Patrick Lafleur
Hi!
I just discovered a small software that really helps improve the design of my invoices using Quickbooks. In fact it will help you create PDF files from every program that includes print command.
The software is called DocuCom PDF Driver. More info here.
From Quickbooks (or any accounting package) you create an invoice template without any “fancy” things like border, etc. You just print the bare data (adresses, memo, terms, services, totals, etc) with the nicest font that you can from your accounting package. When you are done, you print with the PDF driver which allows you to set another PDF as a background or as an overlay. You could design this in Photoshop for example (then print it to PDF!).
Great for producing invoices! Once the PDF is generated you can print/mail it or email it.
That works for me!
Ciao,
Patrick Lafleur
Tyler
This is something I have been thinking about doing for sometime (really incoperating my identity into my invoices) as well as just a great article on inside practices.
Regards,
Tyler