Even though there is a lot of assistance online, including free invoice template options, there are many businesses that lack clear and effective terms and conditions on their invoices. While these details can be convoluted and difficult to word appropriately, it is highly important that you take the time to write them with care.
Leaving things out or including unclear information in your invoice can leave you unpaid and frustrated. You will be far more likely to have smooth cash flow processes if you take the time to clarify your terms and conditions from day one. You can also be sure that your customers will appreciate having terms and conditions that are easy to understand.
Let’s look at some of the essential terms and conditions that you need to add to your invoice.
Think About Worst-Case Scenarios
When you are thinking of what to include in your terms and conditions, ponder a few of the worst-case payment scenarios that could arise. Think of some terms that will help to mitigate these scenarios or prevent them from happening altogether. This could include something like what will be charged if the scope of a project becomes larger, for example.
When you decide on how long of a time period you will provide for your customers to pay you, make sure to bring this down to as small of a window as possible while still being fair. If your payment window is too large and your customer ends up paying you late, then you may be faced with significant cash flow problems.
It is also important that you have terms and conditions in place that will determine what happens when a payment is late. Interest payments on outstanding amounts are a commonly accepted practice, but be sure to specify these in clear language on the invoice itself.
Make Sure To Incorporate All Necessary Invoice Criteria
Starting with an invoice template is a good way to avoid missing any details that need to be included in your terms and conditions. However, it is also good to have a sense of what these details are for your own edification.
Make sure that an invoice contains contact information for both your company and your customer. Have the due date of the payment prominently displayed and be sure to list the services that you have provided for your customer.
Making the whole thing appear as professional as possible is also a good way to get your customers to take the matter seriously.
Some Other Essentials To Consider
Throughout the terms and conditions that you write, it is important that you maintain a polite tone and use simple language. Make sure that you provide comprehensive details about what services or products you have provided for the client so that there is no ambiguity about what is being charged.
Including a reference number on your invoice is also a good idea to help you and your customer stay organised. Especially if you provide services for a variety of different clients, this will help you keep accurate records that are easy to understand.
As a final detail, make sure that you also specify what payment methods are possible.
Get Help Or Use A Template
For more information on making effective terms and conditions for an invoice, there is a wealth of information available online. You can also use a free invoice template to get started and make adjustments to suit the specifics of your business.
While the process of coming up with terms and conditions does not have to be difficult, it does take some conscious thought. Be sure to take your time with how you word these terms to ensure that you will get paid consistently by your customers.