If your company provides goods and services, you know how important invoicing is. While the invoicing process can be tedious at times, it is one of the most important processes to do right. If your business experiences delayed payments and a lot of customer confusion, it may be indicative of poor invoicing techniques. When done correctly, invoicing promotes business, answers questions, and keeps your company organized. How can you improve your invoicing techniques?

Here are the top 10 invoicing mistakes small business make and how to avoid them:

Poor documentation

Keeping receipts, recording payments, and having digital backups of invoices are all extremely important steps in the invoicing process. You should have a copy of any and every invoice you send. Find a good way to file all these copies, either digitally or in a paper format. You will need these receipts to accurately claim tax deductions. And, if your company gets audited, you will need them as documentation. By keeping your receipts filed and organized from day one, you will significantly reduce any accounting issues.


One of the biggest and most common mistakes a company makes when sending invoices is not proofreading the bill. If the invoice number, address of the client, dollar amount, etc. are incorrect, then you risk confusion, or worse, not getting paid. This mistake is easily avoidable. Before sending the bill, double check that the information presented is accurate. If the invoice is for a returning client, reference previous bills to make sure the information lines up and the invoicing number falls in the appropriate order.

Missing important details

Designing your invoices with the appropriate amount of information is vital to maintaining a sense of professionalism and complying to corporate standards. Your invoices should include your company’s and your client’s full legal name, number, and address. It should also include the invoice number and date, any tax numbers, payment terms and conditions, and contact details. Along with a professional layout, including these details shows your seriousness and maintains a positive reputation among your clients.

Unprofessional bookkeeping practices

We know, bookkeeping isn’t fun. But, believe it or not, there are actually people out there who love to do it. Hiring a professional to keep your books is one of the most helpful and useful decisions a business can make. By putting financial records in the hands of someone who knows what he/she is doing, you are guaranteed to never overlook important details and numbers. Not only will every number be accounted for, but you will also never have to worry about months of data piling up while you do anything you can to procrastinate on keeping the books. Staying on top of your books allows you to catch errors faster and ultimately save money over time. Take advantage of hiring a professional bookkeeper to ensure that no preventable mistakes occur.


Billing in your free time may sound like a good plan, but it’s actually costlier than you’d imagine. Without having a set billing time established, companies receiving invoices easily overlook or forget about your bills. As such, make sure your billing process is consistent. Set aside a specific time when invoicing occurs (e.g. the first week of the month). Doing so teaches your customers to expect their invoices around the same time each month, and gets them in the habit of paying regularly.


Invoices should be sent out immediately after finishing a project or delivering a product. Unless otherwise agreed upon between you and your client, you’ll want to bill for your services as soon as possible. Companies that wait to invoice, or invoice irregularly, tend to have a more difficult time receiving payment in a timely manner. Remember: the faster you bill, the faster you get paid. If you are billing consistently and promptly, your customers are more likely to pay in a similar manner.

Failure to itemize

Sure, your customers should know what services your company provided. But, while they may have a general idea, they may not know the exact amounts or prices. Therefore, itemization is key when invoicing. An itemized list includes specific details about the goods and services provided. Depending on your business, this list should include: cost of parts, cost of labor, service performed, product quantity, procedure, hours worked, miles traveled, and more. Your customer should never be confused as to what they are paying for. Being as detailed as possible reduces discrepancies. Then, any further confusions can be addressed via the contact information provided on your invoice.

Failing to follow up with late payments

Ideally, you shouldn’t have to worry about this. In the perfect world, every client will pay the amount they’re supposed to, when they’re supposed to. Unfortunately, that usually isn’t the case. Clients aren’t always going to pay on time. Ultimately, however, it’s your job to keep up with your clients’ payments and remind them to pay on time. Make follow-ups a routine. Remind clients of outstanding invoices, and continually keep track of who has paid and when they did so. It is also imperative to keep copies of invoices at hand to compensate for any misplaced documents. Taking these steps to follow-up successfully will save you money and help you keep track of any debtors.

Unclear terms & conditions

One of the best ways to avoid any confusion during the billing process is to devote a portion of your invoice to clearly spelling out your company’s terms and conditions. In this section, you should describe your business’s late fees, pricing policies, and important details about your products and services. Companies that fail to provide these vital details are more likely to receive incorrect or late payments. Any questions your client has about your policies can be answered by referring to this portion of your invoice. Ultimately, taking the time to provide your customers will this information allows you to get paid faster and more accurately.

Failing to take advantage of marketing prospects

While less severe, this step is equally as important. Don’t treat your invoices as strictly a way to get paid. Instead, take advantage of the space to promote your business. Customers receiving invoices pay close attention to the information presented. As such, devote some space to request feedback, promote a new product, or offer a discount on a future service. Or, if your company does not have any special promotions available, devote a portion of your invoice to display a well-designed logo for your business. These steps encourage customer retention and make your business memorable.

Even if you’ve nailed the invoicing process, your customers can still take forever to pay. That’s why many small business owners use invoice factoring to bridge the gap between issuing the invoice and getting paid.