Are you new to invoicing? do you know the top invoice errors you should never make? Read on to get acquainted to the different invoice errors and how to avoid them.
An invoice is a document issued to a buyer by a seller, with detailed transactions of the products involved, description, and quantity of products.
Also, the stipulated amount for which products are bought and a description of the products are included in the invoice.
Complications may arise in preparing an invoice, in which you have to ensure that the invoice prepared is outstanding and free from errors of any kind.
There are many invoice errors to get rid of in trying to prepare an invoice, but five will be explained here.
The invoice errors you should avoid when preparing an invoice are: providing unclear payment terms and conditions, excluding undisclosed fees in your invoice, unreal invoice numbers, incorrect descriptions of products, and missing information about the company.
The above errors are critical mistakes to avoid when preparing an invoice, and they are what you should not put in an invoice, as they will be explained in detail.
Please take these seriously, especially if you are trying to send your first invoice.
Top Invoice Errors you should never make
1. Providing Unclear Payment Terms and Conditions
The first on our list of top invoice errors you should never make is providing unclear payment terms and conditions.
Terms and conditions are the least of things people bother about in most companies, although it is vital to provide terms and conditions for clarity purposes.
Also it is important to note that the terms and conditions should not contradict the law of the land and should be detailed and precise.
Terms and conditions usually appear at the end of an invoice, in some cases at the top of an invoice.
It is paramount to provide clear terms and conditions to avoid misunderstanding between the buyer and the seller at a later time.
How to Write Terms and Conditions for an Invoice.
In writing, terms and conditions for an invoice it is important to learn how to write terms and conditions, things that should be included in terms and conditions are:
- Including mode of payment
- Mentioning full details of goods and services with tax and discount if applicable.
- The invoice number or reference number should be included in the terms and conditions.
- Mentioning full details of the customer and the company.
- Using straightforward language.
Providing unclear payment terms and conditions is hazardous in preparing an invoice. It will be important to provide clear payment terms and conditions.
2. Excluding Undisclosed Fees in Your Invoice
The second on our list of top invoice errors you should never make is excluding Undisclosed Fees in Your Invoice.
Undisclosed fees are unforeseen fees that a client is charged in purchasing a product or while a service is rendered.
It is important to be honest in all ramifications of life, in preparing your invoice honesty is not excluded, as being honest will avoid contradiction between the client and the firm.
Undisclosed fees or sometimes called hidden fees cause misunderstandings between the client and the firm. Examples of undisclosed fees include:
- Premiums or additional insurance fees.
- Hidden fees by brokers or financial professionals.
- Hidden fee for using an automated teller machine (ATM).
- Fees are deducted by the bank for inactivity.
- Surcharge by cellular company, internet service provider, cable.
These are some types of undisclosed fees that may confuse the client and it is urged to be included in an invoice.
3. Including Unreal Invoice Number
An invoice number is a unique code that is assigned to an invoice to differentiate it from others.
The invoice number is among what you should put in the invoice, using a professional invoice generator is the best way to create a real invoice number.
For payment tracking purposes, accounting purposes, and identification purposes it is important to ensure that the invoice number included is a real one, because including an unreal invoice number only leads to confusion and unclarity.
This is one of the top invoice errors you must avoid in a growing organization.
How to Create an Invoice Number
To create a professional invoice number, it is to be noted that the invoice increases sequentially, meaning it increases.
It is not ideal to number invoices ‘1’, ‘2’, and ‘3’, as it may be confusing in the future if the company grows over the years.
The best way to number an invoice is to include the month or year in which the invoice is issued.
For example, the first invoice of the year 2023 can be numbered as ‘230001’ and the second invoice issued in the year can be numbered as ‘230002’.
The other way to number invoices could be using alphanumeric and special characters.
For instance, ‘INV’ represents invoice number and ‘QUT’ represents quotation number. Examples of alphanumeric invoice numbering are:
These are alphanumeric forms of an invoice, as only the numbers are to increase sequentially.
So it is important for a business entity not to include unreal invoice numbers.
4. Incorrect Description of Products
In an invoice, it is important to describe products purchased, because incorrect descriptions of products will only lead to confusion that may lead to mistrust.
Incorrect descriptions of products can be a result of using manual systems to prepare invoices which may lead to duplication, inaccuracies, and delays.
Many problems lead to incorrect descriptions of products that include:
- The tone of language in the product description.
- Lack of detail.
- Typos and bad grammar.
- Duplicate content.
- Improper product description.
- Excessive dependence on the image.
Product descriptions should be clear to the client to avoid refund, dissatisfaction, and any form of mistake that may affect the conversion rate of your company’s products.
5. Missing Information About the Company
There is a lot of information related to a firm such as a logo, contact address, contact email address, and phone number.
Without all these pieces of information, it will be difficult for a client to know much more about the company or lead to mistrust of information provided in an invoice.
To create an outstanding invoice that is free from invoice errors as a result of missing companies’ information, it is important to ensure that these steps are followed:
- Following up-to-date information about the company.
- Ensuring that the information in the invoice to be prepared is aligned with the updated one of the company.
- Contact the CEO, Manager, or elites in the firm if any information about the company is updated over time.
If any information about a company is missing, it is important for it to be included in an invoice, to increase the credibility of the invoice without doubt from the client.
Your invoice is not to be taken for granted. It is an opportunity for you to show your professionalism and also help you send a positive message to your brand, enjoy legal benefits, and also serve as a task tracker.
The invoice also helps explain the details of goods and services which can make a client maintain a good relationship with a firm.
We have taken time to provide a list of invoice errors that we believe businesses should avoid if they are to be seen by clients as being organized and professional.