Managing your cash flow (3 of 7)

In this issue we are providing advice on ‘INVOICING’ including invoice content, sending the invoice and dealing with disputed invoices…

Invoice content

• It is important that invoices are clear and correct first time. Raising credit notes and reissuing invoices takes time and will, of course, delay payment.
• You should ask customers what they need on the invoice in order to approve them simply and quickly and to avoid queries and delays in payment.

As a guide you should include the following:

1. Your full name and address and any internal reference
2. Invoice date
3. Correct customer name (see Know Your Customer)
4. Correct customer address
5. Delivery address (if different)
6. Delivery date and method
7. Customer Purchase Order number (if provided)
8. A clear description of the goods or service supplied
9. Accurate quantities, prices, any discounts and total amount due
10. Payment terms and due date
11. How and where payment should be made.
12. Your VAT registration number (if applicable)

Sending the invoice

• You should raise and send your invoice immediately after you have supplied the goods or service. The sooner you invoice, the sooner you can get paid.
• Invoices should always be sent by first class post or, if possible, by email.

Dealing with disputed invoices

• It is essential that you have a process in place for investigating and resolving disputed invoices promptly.
• Do not put off dealing with queries or disputes, leaving matters often results in an escalation of the problem, making it more difficult to resolve.
• Be aware that customers may use a small query as a tactic to withhold payment. It is often the case that queried or minor disputes can be resolved quickly by a phone call to your customer.
• In more serious cases of dispute, you should ask your customer to set out their reasons for disputing the invoice in writing, as soon as possible.
• Keep a copy of all documentation and communications relating to any disputes, in case you are unable to resolve the dispute, you may need this information at a later date.
• Finally, log the details of any disputes to identify any trends and avoidable root causes.