Inevitably, if you’d like to be paid for your product or service, you will need to create an invoice. If you were on top of things and wrote up your invoice and sent it off to your customer, your only concern is how soon you’ll get your money, right?
Unfortunately, this isn’t always the case.
Especially when you’re first starting out as an entrepreneur, it can be easy to make small errors when it comes to writing invoices.
But not to worry. We’ve taken a look and compiled the 5 most common mistakes that occur on invoices and also provide some easy ways to avoid them.
1. Vague description of the product or service
It’s important to communicate with your customer in order to provide a thorough description of what they will be paying for - especially with services. This should also be clearly indicated on the invoice sent to your customer.
If necessary, use separate lines to break down each item or service included on the invoice. With invoice software such as Debitoor, you can save detailed descriptions of each item to include them quickly in your invoices.
2. Forgetting payment details on the invoice
When your customer receives your invoice, the end goal is for them to pay you for the product or service you provided. If you don’t provide banking details or another payment method, you make payment difficult or impossible.
In the footer of the invoice you should include your banking details for payment purposes. You could also connect an online payment option for your online invoice in Debitoor to offer your customers a quick and easy way to pay. For example, you can offer PayPal on all your invoices in just a few clicks.
3. Errors in the customer information
We’re all human. Mistakes happen. But when it’s a mistake involving the name or details of your customer it can be a bit more sensitive. And potentially make you come off as inattentive. Your customer might also experience issues with tax reporting if details are incorrect.
To avoid this, it’s common sense to always double check. If you have invoicing software like Debitoor, you will only need to double check once - then that data is saved and autofills in your invoices, reducing the margin for error immensely.
4. VAT not stated correctly
In the case of an incorrect sales tax rate or calculation, there’s always a bit more stress since this relates to the already inconvenient tax filing process. It’s therefore important to always select the correct rate and calculate exactly.
Invoicing and accounting software takes this task off your shoulders. Once the VAT rate is selected, the products and prices entered, all calculation occurs automatically and is displayed clearly on your invoice.
5. Incorrect invoice number
A solid invoice numbering system must be decided upon as soon as you start invoicing. Each invoice must then have its own unique number and each subsequent invoice should have a number that progresses sequentially.
In other words, your first invoice number is 160001, your second is 160002, and so forth. Seems simple, but sometimes it’s easy to forget what number you’re on, which can create gaps or multiple invoices with the same number. In other words, a tax reporting nightmare.
With Debitoor, you never have to think about it. Enter your first number when you start your first invoice and Debitoor automatically updates and assigns the next number to the very next invoice you create.