Step-By-Step Guide: How to Use an Invoice Template for Your Small Business

Anyone running a business would say that it's one tough task. You're juggling client needs. You're supervising project management. You're the one in charge of the finances! Even simple tasks like invoicing can pile up, often left until tax time when you're scrambling to organize everything.

In fact, 59% of small U.S. businesses face late payments regularly. Worse, one-third of them are at risk of closure because of it. (1)

But there's a smarter way: invoice templates. They streamline billing and help you get paid on time. In effect, you get to increase your chances of prompt payment, thus you can focus on responsibilities that truly matter.

If you're ready to improve your cash flow and simplify billing, you're in the right place. This article will share with you some steps on how you can use an invoice template to make your small business life easier.

Step-By-Step Guide: How to Use an Invoice Template for Your Small Business

Select the right invoice template

First, you need to pick the right invoice template. There's no perfect template for everyone, so you really need to think about what your business needs.

Ideally, a good template should have the basics such as:

Your business logo, contact information, and other credentials
Client details
Invoice number and date
Itemized list of products or services
Subtotal, taxes, and total amount due
Payment terms and methods

Many accounting software programs offer customizable templates. You can also find free options online. Suppose you're in the landscaping business. In that case, you might want to look for a lawn care invoice template free of charge to get started. These personalized templates often include fields for common lawn care services like mowing, fertilizing, or tree trimming, which will make it easier to itemize your work.

Overall, the key is to choose a template that's professional, easy to read, and aligns with your brand, whether you're mowing lawns or managing multi-acre estates.

Customize and personalize your template

Once you've chosen a template, it's time to make it yours. Here's how to personalize it:

Emphasize your business details: Your business name, logo, address, and contact details should be prominently displayed at the top of the invoice.
Include your client's information: This should include their name, company name (if applicable), address, and contact information.
Create a unique invoice number: Assign a unique number to each invoice. This helps with tracking and organization. Many businesses use a combination of numbers and letters, including the date (e.g., INV-20240702-001).
Set the payment terms: Clearly state your payment instructions. These include the invoice due date and any late payment penalties.
Add colors: If you're up for it, you may add colors to your invoice template to match your brand. This will make your invoice stand out in a pile of plain, white paperwork.

Your invoice often closes out a job, so make it count. A well-designed, custom invoice can leave a good impression and maybe bring in more repeat business. So, take a few extra minutes to polish it up as it could pay off in the long run.

List your products or services and calculate the total

Now it's time to describe what you're charging for. Make a simple, line-item list of the products or services delivered. Be sure to include:

Description of the item
Quantity — for example, number of products sold or hours worked
Unit price
Total price for the item

Be as specific as possible to avoid any confusion or disputes later on. After writing down all the items, it's accounting time. Make sure to include:

Subtotal of all items
Any applicable taxes
Discounts (if any)
The final total amount due

Double-check your calculations to ensure accuracy. Remember that 61% of businesses that experience late payments are because of incorrect invoices. So, take the time to make your itemized list and calculations as clear as day. (2)

Add multiple payment options

Make it easy for your clients to pay you by clearly stating the accepted payment method and instructions. These might include:

Bank transfer
Credit card
PayPal
Check

Here’s the deal: the more ways you let people pay, the more likely you are to get paid promptly. In fact, a survey found that small businesses that cater to more than four payment options can bring in sevenfold more annual revenue compared to those that accept fewer payment options. (3)

Include additional notes

Don’t overlook the notes section on your invoice. It's a handy spot for putting extra information that doesn't quite fit anywhere else. You might want to add:

A quick thank you to your client
A heads-up about upcoming work
Any special terms or instructions

These little extras can go a long way into building a good relationship with your clients. A friendly note or useful reminder shows you're thinking about them, not just their wallet. On the other hand, be very concise and to the point. You don't want to fill your invoice with irrelevant information. Once you're satisfied with your invoice, it's time to save and send it.

Keep records

After every invoice sent, always keep a copy of the records. This will be useful in keeping track of payments, managing finances, and later on for taxes. Consider using cloud storage or accounting software to stay organized with your invoices.

Update your template regularly

Your business is evolving, and so should your invoice template. Once in a while, check back on the template to see whether it still does what's necessary. You might need to:

Freshen up your logo or branding.
Add new ways for clients to pay.
Tweak your terms and conditions.

A quick update now and then can keep your invoices professional and effective.

Use technology to your advantage

While a basic invoice template can perform wonders, you shouldn't be scared to use technology to get even more efficiency. A lot of accounting software offers additional features such as:

Automatic invoice generation
Recurring invoices for repeat clients
Integration with payment processors for faster payments
Real-time tracking of sent, viewed, and paid invoices

Such tools can save you time and eventually your mind by providing valuable insights related to your cash flow. So, think of using them if you haven't already. They might seem complex at first, but they can make your invoicing process smoother in the long run. Just pick a system that fits your business size and needs.

Parting thoughts

Want to streamline your billing process? Then use an invoice template effectively. To add, this can also improve your cash flow, plus you'll be able to maintain a professional image in the minds of your clients. More importantly, it saves you valuable time, guarantees timely payments, and keeps your business’s overall financial health in the best of conditions. Follow this step-by-step guide and experience the superpower a well-designed invoice template holds.

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