Invoice your way to success
As a contractor working via your ow
Invoice your way to success
n limited company submitting invoices is a very important part of your working life. It’s the way that you receive payment for all the hard work you have done for the client.
Creating and submitting an invoice sounds easy, and it is once you have done a few, but at first it can seem like a daunting task as you want to make sure that you have included everything you have to on the invoice.
Preparing a professional looking invoice is not just about creating a good impression for the client there is certain information that for legal reasons has to be included.
Of course, there are numerous accountancy software packages that create and send invoices for you, but it is still important that you know what has to be included on an invoice.
The following are legal requirements for an invoice:
- Unique identification number – this can be numbers, or letters, or a mixture of both
- Company name, address and contact information
- Company name and address of the person you are invoicing
- Description of what you are charging for – be as detailed as you can
- Date that the goods / services were provided
- Date of the invoice
- The amount being charged
- VAT amount (if applicable)
- Total amount owed
As a limited company you must include the full company name as it appears on the Certificate of Incorporation. If you put the name of the limited company director on the invoice, you must include the names of all the company directors (if there is more than 1 director).
How can an invoice be sent?
You can send an invoice either via post, in person or electronically. Most invoices are sent electronically via email. If you are sending an invoice by email, it is good practice to convert the invoice to a pdf, so that it can’t be altered in anyway.
The client usually tells you how they prefer to receive the invoice. If you are unsure it is probably best to check with them.
An important point to remember is that most clients / agencies require a signed timesheet to be included with the invoice. Without this, they may not be able to process the invoice and you might not be able to get paid.
Contractors can set their own payment terms, but 30 days is the standard payment term. If it is not stated on the invoice, the customer must pay the invoice amount within 30 days of receiving the invoice.
It is expected that the client will pay the invoice within the stated time. However, if you find yourself in a position where payment has not been received, don’t sit on it. Get in touch with the client as soon as possible to get the matter resolved.
Tip tops for creating and sending invoices
One of the main reasons why invoices go unpaid is because they don’t contain clear instructions on how to process the invoice. Make it easy for the client to pay your invoice, by:
- Keeping it simple and avoid adding unnecessary information.
- Sending it to the right person – The person who needs the invoice may not necessarily be your contact at the company. It is often somebody in accounts / payroll.
- Highlighting payment terms and providing instructions on how payment should be made.
- Being prompt with issuing invoices.
Cogent Accountants online accounting portal makes it easy for you raise invoices quickly and in a professional manner. If you are interested to find out how to reduce the time you are spending on invoicing each month, give our team a call on 020 8952 2234 and ask about the services that we offer to contractors.