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Invoice Tracking

Tracking your invoices is essential for managing cash flow and ensuring you get paid. This guide shows you how to set up a simple but effective tracking system.

Why Track Invoices​

Benefits of tracking:

  • ✅ Know what's owed and when
  • ✅ Identify overdue invoices quickly
  • ✅ Follow up on time
  • ✅ Manage cash flow better
  • ✅ Spot payment patterns
  • ✅ Simplify tax preparation
  • ✅ Reduce unpaid invoices

Without tracking:

  • ❌ Lost invoices
  • ❌ Forgotten payments
  • ❌ Cash flow problems
  • ❌ Late follow-ups
  • ❌ Lost revenue

What to Track​

Essential Information​

FieldWhy It MattersExample
Invoice NumberUnique identifierINV-2024-001
Date IssuedWhen invoice was sent15/01/2024
Due DateWhen payment is due29/01/2024
Customer NameWho to invoiceJohn Smith
Customer ContactHow to reach themjohn@email.com, 07123 456789
DescriptionWhat work was doneKitchen plumbing installation
AmountWhat they owe£595.00
StatusPayment statusPending, Paid, Overdue
Date PaidWhen payment received28/01/2024

Optional but Useful​

  • Payment method (bank transfer, cheque, cash)
  • Payment reference
  • Notes/reminders
  • Follow-up dates
  • Customer address

Tracking Methods​

Spreadsheet Tracking (Simple)​

Best for: Starting out, low volume, simple needs

Setup:

  1. Create spreadsheet (Excel, Google Sheets, Numbers)
  2. Create columns for essential information
  3. Add formulas for calculations
  4. Sort/filter by status

Columns:

Invoice # | Date | Due Date | Customer | Amount | Status | Date Paid | Notes

Advantages:

  • ✅ Free
  • ✅ Simple to use
  • ✅ Customizable
  • ✅ Works offline
  • ✅ Easy to learn

Disadvantages:

  • ❌ Manual entry
  • ❌ No automation
  • ❌ Can be time-consuming

Invoice Tracking Apps​

Best for: Medium to high volume, need automation

Recommended apps:

  • Invoice2go - Simple invoicing and tracking (£5-15/month)
  • QuickBooks - Full accounting solution (£12-25/month)
  • Xero - Professional invoicing and tracking (£10-30/month)
  • Zoho Invoice - Free tier available

Advantages:

  • ✅ Automated reminders
  • ✅ Professional invoices
  • ✅ Payment tracking
  • ✅ Reports and analytics
  • ✅ Mobile apps

Disadvantages:

  • ❌ Monthly cost
  • ❌ Learning curve
  • ❌ Requires internet

Simple Database/CRM​

Best for: Growing businesses, multiple customers

Options:

  • Airtable
  • Notion
  • Google Sheets with advanced features

Advantages:

  • ✅ More features than spreadsheets
  • ✅ Better organization
  • ✅ Customer relationship tracking
  • ✅ Customizable

Setting Up Spreadsheet Tracking​

Step 1: Create Your Spreadsheet​

Columns to include:

  1. Invoice Number
  2. Date Issued
  3. Due Date
  4. Customer Name
  5. Customer Email
  6. Customer Phone
  7. Description
  8. Amount
  9. Status (Pending, Paid, Overdue)
  10. Date Paid
  11. Days Overdue
  12. Notes

Step 2: Add Formulas​

Calculate days overdue:

=IF(AND(Status="Pending", Due Date < TODAY()), TODAY() - Due Date, "")

Calculate total outstanding:

=SUMIF(Status Column, "Pending", Amount Column)

Calculate total paid:

=SUMIF(Status Column, "Paid", Amount Column)

Step 3: Use Status Dropdown​

Status options:

  • Pending
  • Paid
  • Overdue
  • Disputed

Create dropdown:

  • Select column
  • Data validation
  • List: Pending, Paid, Overdue, Disputed

Step 4: Add Filters​

Enable filtering:

  • Select header row
  • Data → Filter
  • Sort/filter by any column

Useful filters:

  • Filter by status (show all overdue)
  • Filter by customer
  • Filter by date range

Step 5: Create Summary Sheet​

Track:

  • Total outstanding
  • Total paid this month
  • Overdue invoices count
  • Average payment time

Tracking Workflow​

When You Send an Invoice​

  1. Create invoice - Use your template
  2. Add to tracker - Enter all details
  3. Set status - Mark as "Pending"
  4. Set reminder - Note follow-up date (7 days before due)
  5. Send invoice - Email or deliver to customer

Daily/Weekly Review​

Check your tracker:

  • Review overdue invoices
  • Check pending invoices approaching due date
  • Update status for paid invoices
  • Plan follow-ups

When Payment Received​

  1. Update status - Change to "Paid"
  2. Add date paid - Record payment date
  3. Add payment method - Note how they paid
  4. Calculate payment time - How many days from issue to payment

Follow-Up Schedule​

Automated reminders:

  • Day 1: Invoice sent
  • Day 7: Friendly reminder (if due in 14+ days)
  • Day 14: First follow-up (if overdue)
  • Day 21: Second follow-up
  • Day 30: Final notice

Manual follow-up:

  • Check tracker daily
  • Review overdue list
  • Send reminders as needed

Using Status Effectively​

Status Categories​

Pending:

  • Invoice sent, not yet due
  • No action needed yet
  • Set reminder for follow-up

Overdue:

  • Payment past due date
  • Requires immediate follow-up
  • Check customer contact details

Paid:

  • Payment received
  • Update date paid
  • Can archive after tax period

Disputed:

  • Customer questioning invoice
  • Requires resolution
  • Document all communications

Reports and Analysis​

Weekly Reports​

Track:

  • Total invoices sent
  • Total paid
  • Total outstanding
  • Average payment time
  • Overdue count

Monthly Reports​

Analyze:

  • Total revenue
  • Payment trends
  • Customer payment behavior
  • Problem customers
  • Cash flow patterns

What to Look For​

Red flags:

  • Increasing overdue invoices
  • Customers with multiple overdue invoices
  • Payment times getting longer
  • High percentage of overdue

Good signs:

  • Most invoices paid on time
  • Short payment times
  • Few disputes
  • Consistent cash flow

Best Practices​

Do​

  • ✅ Update tracker immediately when sending invoice
  • ✅ Review tracker daily or weekly
  • ✅ Follow up promptly on overdue invoices
  • ✅ Keep notes on customer communications
  • ✅ Update status as soon as payment received
  • ✅ Backup your tracker regularly

Don't​

  • ❌ Forget to add invoices to tracker
  • ❌ Ignore overdue invoices
  • ❌ Let tracker get out of date
  • ❌ Lose track of follow-ups
  • ❌ Forget to update payment status
  • ❌ Rely on memory alone

Automation Tips​

Email Reminders​

Set up:

  • Calendar reminders for follow-ups
  • Email templates for reminders
  • Automated follow-up schedule

Templates:

  • Friendly reminder: "Just checking you received invoice..."
  • Overdue notice: "Invoice [number] is now [X] days overdue..."
  • Final notice: "Final notice for invoice [number]..."

Payment Tracking​

Link to bank:

  • Reconcile payments with bank statements
  • Match payments to invoices
  • Update status automatically (if using app)

Key Takeaways​

✅ Track everything - Every invoice needs tracking

✅ Update immediately - Don't let it get out of date

✅ Review regularly - Daily or weekly checks

✅ Follow up promptly - Don't let overdue invoices sit

✅ Use status effectively - Know what needs action

✅ Analyze patterns - Learn from payment behavior

Next Steps​

  1. Choose tracking method - Spreadsheet or app
  2. Set up your tracker - Create structure
  3. Start tracking - Add existing invoices
  4. Establish routine - Daily/weekly reviews
  5. Use invoice tracker tool - See our Interactive Invoice Tracker page for a built-in tracking system

Remember: Good tracking is the foundation of getting paid. Set it up properly, keep it updated, and you'll have better control over your cash flow.