Invoicing Software - Create Online Invoices Using QuickBooks

The complete guide to creating invoices

By Madeleine Somerville March 21, 2019

Whether a freelancer, consultant, or entrepreneur, invoicing is a key component of your business. But what is the easiest and more cost-effective way to create invoices? This guide covers everything you’ll need to craft professional invoices:

How to create invoices
Do I need a payment contract?
Should I require a deposit?
How to accept invoice payments
Tracking invoices
Sending friendly reminders
What if clients don’t pay?

How to create invoices

Professional invoices build a cohesive look for your business and brand, as well as highlight the value of the work you’re providing. And QuickBooks streamlines the process with automatic prompts to help you fill in the required information. Here are the essential elements you should include in each invoice:

1. Company information

List your contact information and your customers’ details—legal name, business address, phone and fax number (if applicable)—near the top or bottom of the invoice.

2. Header

Include the title, “Invoice” at the top of your document so customers can immediately identify the communication.

3. Date, invoice number, and unique identifier

Include the invoice issuing date, as well as an invoice number or other unique identifier. This can be a simple file number, unique billing code, or date-based purchase order number.

4. Customer purchase order (PO) numbers or billing codes

Ask your customer about any unique details to include, such as an internal PO number or billing code. For many larger companies, these identifiers are necessary to keep track of payments.

5. Itemized list of goods and services

Your customer—and potentially, an auditor—should understand what goods and services you’ve provided with just a brief scan of the invoice. Include names, dates, rates, the quantity of the goods and services provided, as well as any price modifications, item descriptions, and your work processes.

6. Payment terms

Include a due date and be aware that standard payment terms vary by industry, business, and client relations. Clarify that penalties—late fees or a percentage of the total bill—will be imposed if these terms are not met.

7. Itemized fees

List taxes, handling fees, or other charges, on separate lines. This is important for varying budgets and balancing your internal bookkeeping.

8. Total amount due

Make sure your total amount due is clear and easy to find.

9. Instructions for paying

Provide a clear set of payment steps specifying how you accept payments: online, wire transfer, check, or credit card. The more options you provide, the faster you’ll get paid.

Do I need a payment contract?

A payment contract can clarify and solidify a customers expectations. A QuickBooks Payment Contract explains:

How you charge
The range of services you will provide
Your payment terms
If you charge deposits

Outline parameters for late payments. For example, 10% of the payment late fee for each 10 days a payment is overdue. Go over the contract details with your client before beginning work. Spending five minutes drafting an invoice can avoid costly misunderstandings in the future.

Should I require a deposit?

A deposit of between 30-50% can protect you if client troubles arise. Outline the parameters in your contract, make sure your clients are aware of your policy, and issue an invoice for the deposit amount. When the job is completed, issue a second invoice deducting the deposit amount from the total owed.

How to accept invoice payments

Cash

Cash transactions have no fees, but they cannot be tracked. It is also difficult to securely transfer large sums of money, so cash transactions are rare.

Check

Use a standard checking account as there usually are no transaction fees. However, checks require that you manually update your books and your invoice tracking system.

Automated Clearing House (ACH)

An ACH transaction transfers funds from your customer’s bank account to yours electronically. ACH transfers are fast and secure. Your customers will need to supply their transit and account numbers.

Credit and debit cards

QuickBooks users can accept both credit and debit cards. Transaction fees vary slightly based on the payment platform, but typically range from between 2.4–3.4%.

Do you accept a lot of payments in person? With products like Square and the QuickBooks mobile card reader, you can take credit and debit card payments on the spot. And if you deal in online transactions, PayPal is a great option (and typically has fees of 2.9%). Plus, all integrate seamlessly with QuickBooks software.

BitCoin

Less common than traditional payments, crypto currency transfers are simple for QuickBooks customers—just turn on your PayByCoin feature.

Tracking invoices

If you’re creating your invoices in Word or Excel requires meticulous organization, can leave you open to information loss, and error. QuickBooks’ features take the guesswork out of invoice tracking:

Automatically generated invoice numbers
Sorting invoices by client name
Providing a clear balance sheet of sent invoices
Identifying overdue invoices

QuickBooks also offers a Pay Now button on the invoice itself, which results in clients paying up to two weeks faster.

Sending Payment Reminders

Payment requirements are typically set at 30, 45, or 60 days. But a month is a long time and a payment due date may be forgotten. And, sometimes a friendly reminder is necessary.

Day 15 – Polite reminder email example

“This is a friendly reminder that payment for invoice #0036, in the amount of $1,500 will be due on September 12, 2017. Prompt payment is very much appreciated—please let me know if you have any questions.”

Day 30 – Late payment email example

“This is a friendly reminder that I have not yet received payment for Invoice #0036 in the amount of $1500, due September 12, 2017. Please let me know if you have any questions.”

Day +30 – Time to pick up the phone

Once an invoice is late, it’s time to pick up the phone and call your client. Assume ignorance over malice, but be clear that you expect payment as soon as possible.

The cost of getting paid

With so many payment methods and fees, it’s tempting to stick to good old-fashioned cash and check. But other forms of payment can attract more customers and even get paid up to two times faster. But, is it worth it?

Cost vs. loss comparison

Sam’s latest client, Ms. Ramirez wants to buy a 3,600 square foot house and needs it inspected and tested for radon. After completing the inspection, Sam issues her an invoice for $1,000 (his fixed rate of $0.25 per square foot x 3,600 square feet = $900, plus $100 for radon testing).

Here’s a chart of how much of that $1,000 Sam will end up keeping depending on which type of payment he accepts:

So, is it worth 2-3% of each invoice to offer your clients more payment options, avoid the hassle of depositing checks and manually tracking cash, and get paid up to two weeks sooner? For many business owners, the answer is yes.

When clients don’t pay

Hopefully, you won’t encounter this too often. Since you have a payment contract in place with your client, refer them to the contract parameters. You’ve established a 10% late fee for each 10 days a payment is overdue.

Using invoice factoring is also effective. This is a process whereby a third party buys your invoice debt, typically giving you between 70-90% of its value. When your invoice gets paid, you receive the remaining 10-30% of the invoice, minus the company’s processing fee.

Invoicing is a breeze once you’ve mastered the basics—and with QuickBooks, a well-made invoice personalized for your precise business needs is easily accessible.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Six ways to get your invoices paid on time

By Carrie Smith March 21, 2019

Having trouble getting invoices paid? You’re not alone. Check out these 6 ways to keep the incoming revenue wheels greased, making sure you get paid as quickly as possible.

1. Accept all forms of payment

The easier it is for your customers to pay, the more likely they are to pay on time.

Checks

Paper checks may seem like a thing of the past, but there are still a valid payment widely in use. And after all, there’s no harm in embracing all your clients’ preferred methods of pay. Make sure you clearly list your company’s name and mailing address or PO box on your invoices so clients know exactly where to send checks.

Credit and debit cards

Credit and debit cards are easy to use and help you get paid on time. Some of the best and most popular merchant credit card processing services include:

QuickBooks Payments
Send email invoices with a Pay Now Button, and make it easy for your customers to pay directly within the invoice. Same rates for all major credit cards (2.9% + $.25 for an invoice paid online).
Square
You can process credit or debit cards in person or digitally. Plus, you can auto-import sales and expenses in QuickBooks using the Sync with Square app.

ACH bank transfers

ACH bank transfers are often the cheapest and easiest way to move money. This is especially helpful for repeat customers. Just setup the account and routing numbers once, then collect 100% of the money you’re owed.

PayPal

It only takes a few minutes to receive PayPal payments. The receiver—i.e. the invoicer—is responsible for the fee of $.30, plus 2.9% on every transaction. These fees can be deducted as a business expense.

Mobile pay

Mobile pay is fast becoming one of the most prevalent payment methods around. These are some of the most popular apps that sync with other payment processing services:

Samsung Pay
Apple Pay
Google Pay
Venmo Share Payments
Facebook Messenger Payments

Be flexible, look for options that keep your bookkeeping straightforward and don’t forget to write off the transaction fees associated with digital payments.

2. Create clear invoices

Your revenue relies on getting your invoices paid. It’s worth investing time in making them as clear as possible. Here is a brief checklist of invoice necessities and an example of a thorough and easy to understand invoice:

Make the total and due date clear
Itemize goods and services
Send it to the correct person
Track and simplify with identifiers

3. Be timely

The quicker you send an invoice, the faster you’ll get paid. Here are some ways to ensure your invoices get out quickly, and into the right hands.

Promptness counts

Send out invoices according to the timeline stated in the contract, or as soon as the project is complete.

Automate invoices

Automated invoicing, one of the most helpful features in QuickBooks, allows you to create an invoice template that can be used over and over again. You can even schedule recurring invoices.

Be persistent

Customers and clients are busy, and a payment reminder is often welcomed. QuickBooks can help here too by setting automated email nudges to remind customers that payment is due.

4. Establish Penalties

A penalty may sound negative, but they are a vital aspect of business. Think of penalties as a way to promote timely payments, not punish your valuable customers.

Here are a few ways to implement penalties for late payment:

Flat late fees

A flat late fee is a specific dollar amount set forth in a contract and implemented after an agreed upon payment date has been exceeded.

Accruing interest

An accruing interest charge compounds every week or month that payment is late. The terms of this percentage should be laid out in your contract or payment policy.

Finance charges

Finance charges cover the gamut of flat fees, a percentage of the invoice amount, accruing interest and any other forms of fees you assess clients for failing to pay. QuickBooks Invoicing has this feature built-in, so you can assess any finance charges to outstanding invoices without a huge hassle.

5. Automate reminders

You’re busy. So automated invoice reminders will save you time and a lot of stress. QuickBooks Invoicing software also offers this feature.

Automate reminders before and after the due date

Don’t wait until an invoice is 45 or 60 days past the payment date before setting up an automatic payment reminder. Like with the initial invoice, the likelihood of collecting old invoices decreases over time.

Consider auto-collection

To save you time later, consider requiring a credit card number upfront. This way if invoices aren’t paid on time, you can auto-collect past due payments.

6. Incentivize early or n-time payments

Encourage on-time payments by providing incentives for clients. This is a way of offering a thank you to customers who make payment a priority. Offering early payment perks or sending hand-written thank you notes display a customer-centric outlook.

Late and unpaid invoices create a lot friction in small business. But putting a few simple systems like these in place can greatly reduce the time spent chasing customers and get revenue in your bank account more quickly.

Invoicing and accepting payments

Smart online invoicing with built-in payment processing

Smart online invoicing with built-in payment processing

Low, flat rates. No monthly or setup fees.

Rates per transaction

1%

2.4%

2.9%

3.4%

Low, flat rates. No monthly or setup fees.

Rates per transaction

1%

2.4%

2.9%

3.4%

Low, flat rates. No monthly or setup fees.

Rates per transaction

1%

2.4%

2.9%

3.4%

Low, flat rates. No monthly or setup fees.

Rates per transaction

1%

2.4%

2.9%

3.4%

Send professional, custom invoices

Send professional, custom invoices

Send professional, custom invoices

Accept payments in QuickBooks and get paid 2x faster 1

Accept payments in QuickBooks and get paid 2x faster 1

Receive instant notifications

Receive instant notifications

Automatic matching

Automatic matching

Smart payment tools

Smart payment tools

Accelerated invoicing

Accelerated invoicing

Build customer trust and grow your business

Build customer trust and grow your business

How to create invoices

Do I need a payment contract?

Should I require a deposit?

How to accept invoice payments

Tracking invoices

Sending Payment Reminders

The cost of getting paid

When clients don’t pay

Accept payments in QuickBooks and get paid 2x faster¹

Accept payments in QuickBooks and get paid 2x faster¹