5 common invoice mistakes and how to avoid them
Inevitably, if you’d like to be paid for your product or service, you’ll need to create an invoice. If you were on top of things and wrote up your invoice and sent it off to your customer, your only concern is how soon you’ll get your money, right?
Unfortunately, this isn’t always the case.
Especially when you’re first starting out as an entrepreneur, it can be easy to make small errors when it comes to writing invoices. But not to worry. Here is a list of the top 5 most common mistakes that occur on invoices, and some easy tips and tricks to avoid them.
1. Vague description of the product or service
It’s important to communicate with your customer in order to provide a thorough description of what they will be paying for - especially with services. This should also be clearly indicated on the invoice sent to your customer.
If necessary, use separate lines to break down each item or service included on the invoice. With invoice software such as SumUp Invoices, you can save detailed descriptions of each item to include them quickly in your invoices.
2. Forgetting payment details on the invoice
When your customer receives your invoice, the end goal is for them to pay you for the product or service you provided. If you don’t provide banking details or another payment method, you make payment difficult or impossible.
In the footer of the invoice, you should include your banking details for payment purposes. SumUp Invoices makes the payment process even easier for your customer as they can pay their invoice online, via the payment link provided. This means that even if you don’t want to add your banking details to the invoice, you’ll still receive payment.
3. Errors in the customer information
We’re all human. Mistakes happen. But when it’s a mistake involving the name or details of your customer it can be a bit more sensitive. It can potentially make you come off as inattentive. Your customer might also experience issues with tax reporting if details are incorrect.
To avoid this, it’s common sense to always double-check your customer information. Using online invoicing software means you’ll only need to double-check once - then that data is saved and auto-filled in your invoices, reducing the margin for error immensely.
4. VAT not stated correctly
When an invoice is sent with an incorrect sales tax rate or calculation, it’s naturally stressful. If it’s wrong, it can complicate your tax filing process. It’s therefore important to always select the correct rate and calculate the VAT exactly.
Invoicing and accounting software takes this task off your shoulders. Once the VAT rate is selected, the products and prices entered, all calculation occurs automatically and is displayed clearly on your invoice.
5. Incorrect invoice number
A solid invoice numbering system must be decided upon as soon as you start invoicing. Each invoice must then have its own unique number and each subsequent invoice should have a number that progresses sequentially.
In other words, your first invoice number is 160001, your second is 160002, and so forth. Seems simple, but sometimes it’s easy to forget what number you’re on, which can create gaps or multiple invoices with the same number. In other words, a tax reporting nightmare.
With SumUp Invoices, you never have to think about it. Enter your first number when you start your first invoice and SumUp Invoices automatically updates and assigns the next number to the very next invoice you create.