Whether you’re running a small business or a side hustle, invoicing is one of the most important parts of keeping money flowing. However, if you do it incorrectly, it can cause a host of problems that hit your bottom line and slow your business down.
Let’s cover 12 of the most common invoicing mistakes small businesses make, and show you simple, practical ways to fix them so you can get paid faster and keep your business on track.
Every invoice needs an invoice number. This number serves as a tracking code, helping you and your customers quickly find the details of a transaction, as well as for tax and audit purposes.
But if your numbering system is messy (e.g., skipping numbers, repeating them, or using different formats), it becomes hard to match payments to the right invoice, follow up on overdue accounts, and create a reliable audit trail.
How to fix: Pick a numbering system and stick to it. You can keep it simple with sequential numbers (001, 002, 003) or use dates plus a sequence (20250821-01). The key is to be consistent. If you use invoicing software like QuickBooks, it can automatically generate invoice numbers for you, so you don’t have to worry about mistakes or duplicates.
One of the biggest mistakes you can make on an invoice is leaving out payment terms. Without them, clients don’t know when they’re supposed to pay, and chances are your invoice will end up at the bottom of their to-do list. That means slower cash flow for you and more time wasted chasing down payments.
When setting payment terms, recent research suggests that the more immediate, the better. According to the QuickBooks 2025 Small Business Late Payments Report, 60% of small businesses with longer terms ran into cash flow issues, compared to only 40% of businesses with immediate terms. So, you may want to consider terms like Net 7, Net 15, or “Due Upon Receipt.”
How to fix: Always list payment terms clearly on your invoices and make sure they align with any client agreements or contracts. Choose the shortest reasonable terms for your industry, and don’t be afraid to include late fees (for example, 1.5% per month on overdue balances) to encourage timely payments. You can also offer small discounts for early payment (like 2% off if paid within 10 days) to motivate clients to settle up faster.
Nothing slows down payment faster than sending an invoice with the wrong totals on it. Maybe you miscalculated the total, forgot to add tax, or accidentally billed for the same thing twice. This leads to unnecessary back-and-forth: your client has to question the invoice, you have to resend it, and everyone loses time.
How to fix: Don’t rely on a calculator or mental math. Use invoicing software that does the totals for you, including taxes, fees, and discounts. Tools like QuickBooks can automatically add everything up and reduce the chance of human error. It also helps to build in a quick review step before you hit “send”. Even just a minute to scan the numbers can save you days of waiting for a corrected payment.
You can spend time making a perfect invoice, but if it never lands in the right inbox, you’re not getting paid. Maybe your main contact left the company, maybe the accounting team uses a different email, or maybe you just typed one letter wrong. Either way, your invoice goes missing, and your payment gets delayed.
How to fix: Always double-check that you’re sending invoices to the correct email. Ask new clients if they have a dedicated billing contact or accounts payable inbox, and update your records anytime there’s a change. Better yet, use invoicing software like QuickBooks that stores client details for you, tracks delivery, and sends automatic reminders. That way, you’re not stuck wondering if your invoice went to a black hole.
Remember, your invoice is for recordkeeping, too. If you leave out important details like your business name, address, or your client’s info, you make it harder for them to process the invoice and get you paid on time. Worse, if your records aren’t complete, you could run into problems during tax season or if your finances are audited.
How to fix: Always include the essentials. At minimum, that means:
You don’t have to remember all of this every time. Use invoice templates to make sure every field is covered and nothing important gets lost in the shuffle. You can also take advantage of Intuit Assist’s free invoice generator. It uses AI to autofill your business and product details, pull in your brand colors and logo, and automatically calculate totals and taxes, so you can create a professional, accurate invoice in minutes.
Even the best invoice won’t get you paid if it shows up late. The longer you wait to send it, the longer it takes for the money to hit your account. For small businesses, those delays can throw off your cash flow, make it harder to budget, and leave you scrambling to cover expenses.
How to fix: Make invoicing a habit, not an afterthought. Send invoices as soon as you complete a job or deliver a product, instead of waiting until the end of the week or month. If you handle repeat work, schedule recurring invoices so they go out automatically. Tools like QuickBooks can even add “Pay Now” buttons to your invoices, making it easier for clients to pay right away.
Sending an invoice is only half the job. Making sure you actually get paid is the other half. If you don’t follow up when a payment is late, you're leaving money on the table. Clients may forget, misplace your invoice, or simply push it off if there’s no reminder. Without a clear follow-up process, small delays can turn into weeks or even months of waiting.
And the cost of letting things slide is huge. The 2025 QuickBooks Small Business Late Payments Report found that U.S. small businesses are owed an average of $17,500 in unpaid invoices, with nearly half saying some of their invoices are more than 30 days overdue. These past-due invoices obviously hurt your cash flow, but they can also force you to lean on credit cards, delay hiring, or raise prices just to cover the gap.
How to fix: Put a follow-up system in place. Send a polite reminder the day after an invoice goes past due, and don’t be afraid to get firmer if weeks go by without payment. If you charge late fees, make sure that’s clear up front so clients know you’re serious. Also, consider using QuickBooks because you can get paid 5 days faster on average when you send invoice reminders through the platform.
If you don’t have a system for tracking invoices, you’re basically guessing at your own cash flow. You might not know which invoices have been paid, which are still waiting, or which are long overdue. That’s how money slips through the cracks. It can also make tax season a nightmare, since incomplete records mean more time digging through emails or spreadsheets just to prove what’s owed.
How to fix: Set up a clear way to track every invoice. At the very least, log the invoice number, client name, amount, due date, and payment status. But instead of relying on spreadsheets or rummaging through email chains, use invoicing software like QuickBooks, which automatically tracks payments, flags overdue invoices, and even sends reminders for you.
If you’re only saving invoices in a spreadsheet or your email, you’re taking a big risk. All it takes is a computer crash, a deleted file, or a lost hard drive, and suddenly your financial records are gone. Without a backup, you might have no way to prove what clients owe, or you could run into problems at tax time when the IRS asks for documentation you can’t find.
How to fix: Use cloud-based accounting software like QuickBooks, which automatically saves and secures your invoices. That way, even if your computer crashes, your records are safe and accessible from anywhere.
If you only give customers one or two ways to pay, you’re making it harder for yourself to get paid on time. Clients expect flexibility. Some prefer credit cards, others want to use ACH transfers, PayPal, Apple Pay, or Venmo. If you don’t accept payments the way they want to send them, you run the risk of delays or, worse, not getting paid at all.
How to fix it: Make payments easy. Accept cards, ACH transfers, PayPal, Venmo, Apple Pay, and keep traditional options on hand for clients who prefer them. Plus, if you use tools like QuickBooks, you can embed a payment link directly in your invoice so clients can settle up in just a few clicks.
Forgetting about taxes when you create invoices can cause way bigger problems than a late payment. If you don’t charge the right sales tax, VAT, or other required taxes, you could end up underpaying, overpaying, or facing penalties from the IRS or your state.
Clear tax info also matters for your clients. When you break out the tax rate and total separately, you’re showing professionalism and transparency. Skip it, and customers may question the invoice or push back on paying. Plus, the IRS recommends holding onto records like invoices for at least three years, since they act as proof of income and deductions if you’re ever audited.
How to fix: There are multiple ways to avoid this mistake. You should:
Hidden fees can quickly damage client trust, whether it’s a “processing fee,” “handling charge,” or some other add-on they weren’t expecting. Instead of paying right away, clients may question the invoice or possibly question whether they want to keep working with you.
Plus, if you’re a live-event ticket or short-term lodging business, hidden fees can put you at risk with regulators. The Federal Trade Commission (FTC) now enforces the “Rule on Unfair or Deceptive Fees,” which requires these types of businesses to clearly disclose the total cost of goods or services upfront and bans misleading or surprise charges.
How to fix: Be upfront. If there are fees that need to be included, make sure they’re disclosed early, either in your proposal, contract, or clearly listed on the invoice. Avoid vague labels like “administrative fee” and explain exactly what each charge covers. Better yet, build those costs into your pricing from the start so there are no surprises later.
There are a handful of common reasons errors creep into the invoicing process. Let’s break down some of the biggest culprits:
If you’re typing everything by hand into Word or Excel, it’s easy to slip up. Maybe you accidentally leave off a line item, calculate sales tax incorrectly, or add an extra zero to the total (which your client will definitely notice). These little errors can create big delays when clients push back or ask for corrections.
Many small businesses don’t have a set workflow for invoicing, like when invoices should be sent, who checks them, or how overdue payments are tracked. Without a system, every invoice feels like starting from scratch, and mistakes become almost inevitable.
Relying on Word docs, spreadsheets, or email attachments makes invoicing harder than it has to be. These tools don’t automatically track payments or flag overdue invoices, so you’re left chasing down information manually. As your business grows, those systems may not be able to keep up, and the mistakes can multiply.
If you run a small business, chances are invoicing is just one of many things on your plate. One minute you’re handling customer service, the next you’re posting on social media, then you’re jumping back into a project. With so many responsibilities competing for your attention, it’s easy to rush through invoices or push them off until later. Unfortunately, that’s when mistakes start to pile up, like forgetting to add payment terms or sending an invoice late.
What worked when you had a handful of clients doesn’t always scale. As your business grows, your invoicing system that once felt simple (like a spreadsheet or sending PDFs by email) can quickly become unmanageable. Suddenly, you’re juggling dozens of clients, different payment terms, and multiple due dates, which can all lead to a recipe for mistakes.
Sloppy invoicing causes several problems for your business that go beyond just hurting your bottom line. Take a look what damage these mistakes can do for your business:
Instead of stressing about late payments, lost invoices, or unhappy clients, you can set up simple systems that keep your business running the way it should. Here’s how:
Manually creating invoices in Word or Excel might work at first, but it’s a hassle to keep everything straight. With invoicing software like QuickBooks, you can keep all your invoices in one place, automatically number them, add taxes, and even let clients pay online. It makes the process faster for you and easier for them.
Before you hit “send,” take a moment to confirm that names, dates, invoice numbers, and totals are correct. A few extra minutes of proofreading now can mean faster deposits later.
Clients don’t always pay on time, but that doesn’t mean you should wait around. Set up a simple system to remind them. Send a friendly note a few days before the due date, then another right after if payment hasn’t come through. Most invoicing tools can automate this so you don’t have to chase payments yourself.
Using a consistent invoice template makes life easier for everyone. You won’t forget key details like tax, due dates, or totals, and your clients get clear, professional invoices every time. Plus, with tools like QuickBooks, you can customize templates with your logo and colors so they look polished without extra work.
If invoicing eats up too much of your time, consider hiring a bookkeeper or accountant who can set up a system, handle the details, and make sure your records are tax-ready. That way, you can focus on running your business while knowing your finances are in good hands.
Invoicing doesn’t need to be complicated. With the right systems and best practices in place, you can you can avoid costly mistakes, get paid faster, and build stronger relationships with your clients.
QuickBooks makes invoicing simple, professional, and reliable with customizable invoice templates, automated reminders, recurring invoicing, and more. Plus, customers who send invoices in QuickBooks Online save over 11 hours per month on average, which is time you can spend growing your business instead of hunting down payments.
Start sending smarter invoices today with QuickBooks, and take the guesswork out of getting paid.
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