Every business has few things in common. Be it a small or large-scale business, invoicing plays a crucial role. Online invoicing software is the heart of your small business organization. With the right recurring billing and invoice system, you can help your small business to expand easily and accurately.
So, what is a perfect invoice?
Does invoice literally mean showing total calculation?
What is the right format of a small business invoice?
Let us discuss with the blog post further, the importance of focussing on the essentials of a small business invoice.
What is an Invoice?
An invoice refers to the list of services/goods provided by the seller to the buyer. Here the seller may be an organization, an individual, or any other legal body. The list includes the details of the services or goods provided with a sum due for payment.
Having the best estimate and invoice software helps your business in generating a customized yet professional invoice. Professional invoices are highly entertained in the corporate world. Manual invoices are old school tactics, which aren’t entertained in the world of business.
An online billing software like Moon Invoice helps your business to create professional invoices. Our invoice includes various components/essentials that must be specified and included while issuing your small business invoices.
Tip: You can make your invoices interesting from boring using customized Moon Invoice Templates.
What are the Crucial Invoice Components?
Like every legal or authorized document, an invoice has a pre-built format that makes it look professional and apt. Small businesses must focus on the invoice components to create a good impression in front of their clients, buyers, and vendors.
Let’s discuss the Invoice Essentials
1. Invoice Number
An invoice number is a unique invoice numeric code that is displayed on the top of the invoice. It is a highly important element as an invoice number gives a unique identity to each invoice.
Your small business has multiple customers and multiple invoices raised for each customer. An invoice issued by the recurring billing and invoice system takes care of the components like invoice code/number. The online billing software issues the invoice number automatically as per the last invoice issued in the system. Hence you need not take care of defining or checking the invoice code/number sequence.
Invoices are generally mentioned as #0001, #0005, #1056 or #CustomerA0001, and so on. Moon Invoice best estimate and invoice software allow you to create customized invoices with the choice of different templates.
2. Date of Issue
The date of issue is quite mandatory because it is connected with the payment terms. We shall discuss the payment terms further. But to make it easy and simple for you to understand, let me share an example.
The invoice date of the issue reflects the date on which the business invoice is created. It is again mentioned on the top of the invoice. You have to be very careful while mentioning the date of an issue because, generally, in the payment terms, the company mentions the payment to be completed within the particular period from the date of the issue.
3. Company Details
When the invoice is issued from your company, your company’s correct details need to be mentioned. The details include company name, company address, contact details, email ID, fax details, website, etc. All these details help your customer reach you back easily if any issues or confusion are related to the invoice.
Above all, company detail is an essential component of a professional invoice. Having displayed the company details helps the customer to trust the brand and make a connection.
4. Company Logo
Just like the company details, a company logo is an important element of a small business invoice. The logo represents your company or brand. Displaying your company logo helps the customer to differentiate your raised invoice from other invoices.
A logo is a graphical representation that catches attention more easily than words or content. Displaying a logo connects your brand to the customer’s mind. Moon Invoice allows your small business to upload a logo on the invoice. Check out our free trial for more information.
5. Customer Details
An invoice issued is always issued for a particular individual or group, or company. Hence, the details of the customer need to be mentioned accurately in the invoice.
Customer details include the name of the customer, contact details, designation, association with the company, email ID, and any other code or information designed for customer information.
6. Product/Service Breakdown
The most important element of a small business invoice is the breakdown of products and services. An online billing software like Moon Invoice helps your business mention both products and tasks in different segments for easy bifurcation of goods and services.
The breakdown includes product description, product quantity, product price per piece, and the total amount for the mentioned products. Likewise, an invoice mentions the service breakdown as a type of service, service details including hours dedicated to completing the service, service fees, etc.
A professional recurring billing and invoice system like Moon Invoice helps you mention both products and services in a single invoice.
7. Total Payment Including Tax Summary
After all the details mentioned above are narrated in the invoice, the online invoicing software automatically calculates the total payment. Moon Invoice helps small businesses to update the tax column for particular clients and businesses. Hence, you need not mention the tax details or slab differently for each customer.
An invoice must include a tax summary before calculating the final payment as the customer has to pay tax while paying for the product and services. It also serves as the tax calculation while downloading the tax reports accordingly.
8. Payment Due Date
Payment due date is important for helping your customers know the payment deadline. Generally, the payment due date is mentioned according to the invoice date of the issue. Many small businesses mention the payment due date as 30 or 40 days from the invoice issued date.
9. Payment Terms/Details
The payment details include information such as the payment date, bank account details of the company, IFSC code of the bank (for helping customers to pay online), UPI payment details, Paypal details or ID, etc.
Payment terms are often mentioned at the end, such as extra charges or fees to be paid if the payment due date is missed. It also includes clauses and conditions such as full payment accepted, payment not to be issued in the parts, payment to be issued in the name of, etc.
Why Should Your Small Business Focus on Essential Elements of Invoice?
Small businesses need to focus on an invoice’s essential elements while issuing invoices because manual invoices are often confusing and misleading. Clients or customers value and entertain invoices that are auto-generated via online invoicing software.
Focussing on the invoice elements mentioned above, your business can create professional invoices that are accurate in terms of calculations and sequences. The information mentioned by your accountant or manager can still be incorrect, but with the help of online billing software, you can edit invoices easily without much hassle.
Small businesses must invest in a recurring billing and invoice system as it helps their business to manage the revenue operations with accuracy and efficiency. If you are wondering what a professional invoice looks like, you must have an idea about the same while checking the invoice components.
Moon Invoice helps your small business set up a professional invoicing system with our customized invoice and estimate software. Consult our business team for more details or try free by signing up with your email ID. We help you create and issue invoices via windows, macOS, Android, and iPhone.