How to Create a Template for a Service Invoice

A service invoice template gets you paid and back to business.

Invoicing clients is about much more than documenting how much you are owed. Create a good template for a service invoice and you are on your way to a more effective billing system for your business. It is important to achieve uniformity in certain aspects of your business, and communicating clear, consistent payment terms to each customer takes center stage. In order to keep cash flow pumping in, be ready for the challenges that payment collection can bring.

Things You'll Need

• Computer
• Software program with word processing or spreadsheet capabilities

Instructions

Service Invoice Template Tips

1. Establish an invoice management policy. According to Paul Hoeper, president of the Louisiana-based invoice management company CollectPro Software, this is the most important step you can perform when developing a service invoice template. "This policy governs the terms you extend to customers as well as how current and late invoices are handled," Hoeper said. "It covers all the correspondence with customers, including 'Thanks for your Business' and 'Payment Terms Reminder.' Additionally, it covers timelines and the exact actions you will take when an invoice goes late." Hoeper notes that it is important to include this information on your template, because it effectively communicates invoice terms to clients or customers and protects your business when seeking collection.

2. Include appropriate tax considerations. Hoeper notes that tax considerations are the most important legal requirements that you will encounter when building an invoice template, but also points out that service payments are often ineligible for tax payment.

3. Itemize services. Note on the invoice the exact services that were provided, as well as the cost for each before sub-totaling out, adding additional charges, and coming to a final tally. According to Hoeper, the more detailed an invoice, the better. He points out that products are considerably easier to itemize, but that service providers should not feel intimidated when "delivering intangibles" to customers. Every action has a value, and as long as those values are spelled out and effectively communicated, the payment collection process will move much smoother.

4. Clarify where payments should be sent. In the old days, according to Hoeper, this was a no-brainer. However, the digital age has changed the way people send and receive payments. If you only accept payments via mail, bold your address and make it clearly viewable. If you are billing electronically, indicate whether you take credit cards or money transfer services. "There is a revolution in e-invoicing taking place," Hoeper says. "Only a few percent of businesses currently use e-invoicing but that number is expected to push explosively upward in the years ahead. Using e-invoicing accelerates payment on current invoices and decreases the cost and waste of sending invoices in the mail."

5. Know the numbers. Display the customer's account number to facilitate faster processing of payment, and have a clear system of invoice numbering for the sake of reference. Doing so comes in handy in both the digital world and the brick-and-mortar, should you ever need to revisit a transaction.

Tips & Warnings

• Proactive invoice management drives payment. Follow up with calls and e-mails that reflect the following: Term reminders, payment arrangements, feedback opportunities, credit hold warnings, and a final demand letter.

• Collect before an invoice goes 90 days late. If not, your chances of collection, according to Hoeper, drop to 52%.

References

• Paul Hoeper; President of CollectPro Software; Slidell, Louisiana

Resources

• 15 Invoicing Tips: Freelancers and Service Professionals