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Getting Started with Invoicing

Getting paid promptly is crucial for your cash flow and business sustainability. This guide will help you set up professional invoicing processes that get you paid faster.

Why Professional Invoicing Matters​

Good invoicing practices:

  • ✅ Get paid faster (30-60% faster on average)
  • ✅ Look professional and build trust
  • ✅ Reduce payment disputes
  • ✅ Track your income easily
  • ✅ Meet legal requirements
  • ✅ Simplify tax preparation

Poor invoicing practices:

  • ❌ Delayed payments (30-90 days or more)
  • ❌ Unprofessional appearance
  • ❌ Payment disputes and confusion
  • ❌ Lost invoices
  • ❌ Cash flow problems
  • ❌ Tax headaches

Essential Invoice Information​

Every invoice must include:

Required Information​

InformationWhy It's NeededExample
Invoice numberUnique identifier for trackingINV-2024-001
Date issuedWhen invoice was created15 January 2024
Due dateWhen payment is expected29 January 2024 (14 days)
Your business detailsLegal requirementName, address, contact
Customer detailsWho to invoiceCustomer name, address
Description of workWhat was done"Kitchen plumbing installation"
Line itemsBreakdown of chargesLabour, materials, parts
Total amountWhat they owe£1,250.00
Payment termsHow to payBank transfer, cheque, etc.
Payment detailsWhere to send paymentBank account, sort code
  • Your VAT number (if VAT registered)
  • Payment reference/account code
  • Terms and conditions
  • Late payment policy
  • Contact information for queries

Invoice Numbering System​

Why You Need Invoice Numbers​

  • Legal requirement - Required for VAT if registered
  • Tracking - Easy to reference in conversations
  • Organization - Find invoices quickly
  • Professional - Shows you're organized

Numbering Systems​

Simple Sequential:

  • INV-001, INV-002, INV-003...
  • Best for: Starting out, low volume

Year-Based:

  • INV-2024-001, INV-2024-002...
  • Best for: Annual organization, tax purposes

Customer-Based:

  • CUST001-INV-001, CUST002-INV-001...
  • Best for: Tracking by customer

Date-Based:

  • 20240115-001, 20240115-002...
  • Best for: Daily invoicing

Recommended: Year-based system (INV-2024-001) - easy to track and organize.

Payment Terms​

Common Payment Terms​

TermDescriptionWhen to UseExample
Due on receiptPayment due immediatelySmall jobs, one-off workSmall repairs, emergency work
Net 7Payment due in 7 daysStandard workMost jobs
Net 14Payment due in 14 daysStandard workMost jobs
Net 30Payment due in 30 daysLarge jobs, commercialBig projects, B2B
50% upfront, 50% on completionSplit paymentLarge jobs£500+ jobs
Deposit + balanceDeposit upfront, rest on completionLarge jobsInstallations, big repairs

For most tradesmen:

  • Small jobs (<£200): Due on receipt or Net 7
  • Medium jobs (£200-£1000): Net 14
  • Large jobs (£1000+): 50% deposit, 50% on completion

Setting Clear Terms​

On your invoice, clearly state:

  • "Payment due within 14 days"
  • "Payment due on receipt"
  • "Late payment may incur charges"

Payment Methods​

Accept Multiple Methods​

Offer:

  • ✅ Bank transfer (BACS/CHAPS) - Most common
  • ✅ Cheque - Traditional, still used
  • ✅ Cash - For small amounts
  • ✅ Card payment - Using card reader (Square, SumUp)
  • ✅ Online payment - PayPal, Stripe (for larger jobs)

Include on invoice:

  • Bank account details (account number, sort code)
  • Bank name
  • Payment reference (invoice number or customer name)

Invoice Timing​

When to Send Invoices​

Best practices:

  • ✅ Send immediately after job completion
  • ✅ Send during working hours (Monday-Friday, 9am-5pm)
  • ✅ Send same day if possible
  • ✅ Don't wait - send while job is fresh

Why timing matters:

  • Customers remember the work better
  • You're more likely to get paid quickly
  • Shows professionalism
  • Reduces payment disputes

Frequency for Regular Customers​

  • Weekly customers: Send weekly invoice
  • Monthly customers: Send monthly invoice
  • One-off jobs: Send immediately after completion

Invoice Follow-Up​

When to Follow Up​

Payment reminder schedule:

  • Day 1: Invoice sent
  • Day 7: Friendly reminder (if Net 14 or longer)
  • Day 14: Second reminder (if overdue)
  • Day 21: Final notice
  • Day 30+: Consider debt collection

How to Follow Up​

Be professional but firm:

  • Friendly reminder: "Just checking you received invoice INV-2024-001..."
  • Polite follow-up: "Invoice INV-2024-001 is now overdue..."
  • Final notice: "Invoice INV-2024-001 is now [X] days overdue..."

Communication methods:

  • Email (preferred - paper trail)
  • Phone call (friendly reminder)
  • Text message (quick check)
  • Letter (formal notice)

Quick Start Checklist​

Before You Start Invoicing​

  • Decide on invoice numbering system
  • Set up payment terms
  • Get bank account details ready
  • Choose invoice template
  • Set up tracking system (spreadsheet or app)
  • Decide on payment methods to accept

For Each Invoice​

  • Unique invoice number
  • Date issued
  • Due date
  • Your business details
  • Customer details
  • Description of work
  • Line items with prices
  • Total amount
  • Payment terms
  • Payment details
  • Send immediately after job
  • Track in your system

Key Takeaways​

✅ Invoice immediately - Don't wait to send invoices

✅ Include all required information - Legal requirement and professionalism

✅ Use clear numbering - Track and reference easily

✅ Set clear payment terms - Avoid confusion

✅ Follow up professionally - Don't be afraid to ask for payment

✅ Track everything - Know what's owed and when

Next Steps​

  1. Create your first invoice - Use our Interactive Invoice Generator or see Invoice Templates
  2. Set up tracking system - See Invoice Tracking or use our Interactive Invoice Tracker
  3. Learn payment strategies - See Getting Paid Faster
  4. Understand payment terms - See Payment Strategies

Remember: Professional invoicing is the foundation of getting paid. Set it up right from the start, and you'll get paid faster and more consistently.