Invoicing is a crucial part of any business; after all, it is your proof of sale and the legal document that allows your customers to make final payments. However, creating accurate and timely invoices is a tedious task for many businesses. Contractors often find it difficult to create professional invoices for each project with different timelines and billing terms.
State-of-the-art advanced general contractor software allows you to create professional invoices in minutes. You can learn more about these software solutions at https://gobridgit.com/blog/10-best-general-contractor-software-programs/.
In this article, we will show you how to create your contractor invoice template and what mistakes to avoid while invoicing.
Include your company information
Put your company name, contact details, and logo in your header. They provide information about your business to your client and their associates and work as a branding tool. Having a professionally designed contractor invoice template builds credibility and leaves a good impression on clients.
Add for customer contact details
Ask your customer for the contact information for the contractor invoice. Many large companies have a separate billing department. Be sure to include the correct name and address under the heading. Accuracy here will demonstrate to your clients that you are attentive to detail and always on the right track. This will also help avoid billing errors later on.
Generate an invoice number
It is good to assign a unique invoice number to each invoice that you send out. It helps keep records for both you and your clients. It also makes it easy to reference a specific invoice in case of any discrepancy. You can create any sequence you want; write the numbers starting with # 001 or include alphanumeric sequences for specific projects such as # MR01 or # CA02.
Add a date
Adding the correct date is important. Many clients will reject your invoice without a date. Include it on the top of your invoice. A date is required for record-keeping and timely payments.
List your services accurately
Provide an itemized description of your products and services. Create columns in your invoice to add specific details about each project. The details must include the work completed, the time put in and the materials used, as well as charges for other services, such as costs of getting civil approvals.
Include your payment terms
Including your payment terms is crucial. What payment methods do you accept? What is your late payment policy? If you accept electronic payments, then provide customers with links and details to transfer money online.
Mention the payment deadline
To receive timely payments, do not forget to mention the payment due date. Comply with all legal terms and conditions to avoid fraud and misconduct.
A professionally executed invoice with clear terms and conditions provides operational transparency and builds trust between contractors and buyers.
Invoicing mistakes to avoid
As a contractor, you can get paid faster if you provide timely and accurate invoices to your clients. Many contractors, however, commit the following mistakes that lead to payment issues.
Not tracking work hours
If you had presented an estimate for time and material at the beginning of the project, you are going to bill your clients based on the number of hours worked and material used. Not tracking the work hours can lead to invoicing mistakes and affect your payments. Therefore, it is crucial to track your hours and record them either manually or with the help of cloud-based software.
Not formatting the invoices
Sending all invoices in one format seems unprofessional and confusing for different clients. Changing the details of each invoice manually can be time-consuming and tedious. Therefore, you should create an invoice template that you can easily customize regularly for different services and tasks. Ensure that basic business information is consistent across each invoice and make room for other settings.
Not sending invoices on time
Check with your customer for payment terms. Some clients clear invoices and pay immediately upon completion of work, and some prefer to pay at the end of the month or quarter. Depending on the terms of your contract, be sure to send invoices on time to receive payments on time. Prepare a template so that you don’t have to manually fill in each detail in every invoice. It can automate the function and save you a lot of time.
Not adding your payment terms
Some customers can take advantage of liberal payment terms and hold the payments for long. To ensure that payments are received on time, no matter what, do not forget to include your payment terms.
Discuss the terms of payment before signing the contract to avoid misunderstandings in the future. Also, clearly state the payment methods you accept. If the customer does not know the payment methods you accept and is trying to pay you another way, it can frustrate both of you and cause unnecessary delays in payments. It also creates a bad impression on your customers.
Not following up on late payments
Follow up as soon as a client crosses the payment deadline. You may find it embarrassing and intimidating to call your customers for payment. But, to ensure you get paid, it is important to remind your clients politely. Sometimes, clients have technical issues, or they are not clear about the contractor’s payment terms. If you don’t follow up with them, you may not be able to find out the reasons for delay or non-payment. A reminder note will help you in finding out the cause of the delay. You can provide the client an alternative if the current payment method is not working for them or they have any queries related to your invoice.
Irrespective of the project size and duration, it’s good to invoice clients as soon as the work gets completed. Technology platforms like Bridgit offer customizable contractor invoice templates in Canada. Once you know what information to include in your document, you can quickly edit these templates to create professional invoices for different clients.