5 Key Invoicing Tips for E-Commerce Businesses
Running an e-commerce business requires a wide range of skills. If you’re managing your online store either alone or with a small team, it can be especially hard to juggle tasks such as charging clients for products and keeping track of revenue.
Invoices are an efficient way to communicate with clients about payments, and keep a record of your e-commerce site’s income. By generating clear, well-labelled files regarding how much your customers owe, you can protect your business while improving your organization and records.
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In this article, we’ll discuss creating invoices for e-commerce businesses, and highlight important information you should include. Then we’ll share five key tips on how to use invoices to benefit your e-commerce business. Let’s get started!
An Introduction to Creating Invoices for E-Commerce Businesses
Whether you sell products or services, there are a few key pieces of information that should always be included on your invoices. Some – such as a unique serial number, your business’ name and contact information, and the customer or client’s details – help with record keeping.
Others clearly inform your customer how much they owe. For example, listing taxes for the products customers buy from you will help explain the grand total. You should also include an itemized list of the products or services you delivered, as well as any discounts or additional fees.
Finally, listing the customer or client’s payment method (and your terms and conditions) can help in the event of an unsatisfied client or a product return. In either case, the necessary information can be located quickly in your records.
If you’re worried about missing a vital piece of information on your invoices, you can always use an invoice generator or an invoice template. This will help remind you to include easily forgettable items, such as a serial number. At Hiveage, we offer a free invoice generator you can try.
5 Key Invoicing Tips for E-Commerce Businesses
While invoices can seem like a lot of extra paperwork, using them consistently can help you out of several sticky situations. The tips below will show you how invoicing can help keep your e-commerce business on track.
1. Send Invoices Promptly to Encourage Timely Payments from Customers
Getting paid on time is incredibly important. If you don’t receive payments on time, you could find yourself without money you’d planned to use elsewhere. As such, promptly delivered invoices can help remind customers or clients to send payments.
If you sell products, including the invoice in the package ensures the customer will definitely receive it upon receipt of their items. Likewise, you can send clients an invoice upon completion of your services, or alert them to your consolidated invoicing schedule so they know when to expect the bill.
2. Keep Records of Previous Invoices for Tax and Budgeting Purposes
Thorough invoice records can simplify your business accounting. When filing taxes, for example, you’ll need a record of your income. If you keep neatly organized files for every invoice, you’ll have a way to quickly calculate exactly how much revenue your e-commerce site generated.
Likewise, invoice records can provide helpful information for creating a budget, which is an important process for any small business. By providing detailed information about your income, invoices can help you create a budget you can actually use to manage your business.
3. Manage Late Payments from Customers With Detailed Files
When running a business, you always face the risk of clients who pay late or not at all. Having all of your invoices on file can help protect your business by providing a record of what you’d delivered, and how much the client owes should you need to take legal action.
However, before escalating a potential issue, it’s considerate to send reminders to the client. You can keep these too, and attach them to the original invoice to show that you’ve made an effort to give the client multiple chances to pay their bill.
4. Use Electronic Invoices to Work Faster and Stay Organized
Managing all your invoice records can become difficult if you’re working with paper documents. Electronic invoices help you keep all your records in a single, easily accessible place. This way you don’t have to worry about losing folders or sheets of paper.
Plus, by providing templates and offering recurring invoice options, electronic invoicing systems such as the one we offer at Hiveage can speed up your billing process. You can even track your time and expenses and convert them into invoices to manage your work efficiently.
5. Submit Invoices to the Authorities When Undergoing an Audit
Hopefully you never have to undergo an audit by the Internal Revenue System (IRS). However, if you do, invoices can help the process go smoothly. A complete record of your income, such as your invoices, can provide important information to the auditors.
The IRS can request records for the past seven years too. Hanging on to your invoices for at least that long ensures you can quickly produce them if necessary. This will help speed up the auditing process so you can get it over with and return to focusing on your business.
Your e-commerce business likely takes a lot of time and energy to maintain, but using invoices can help make some processes simpler. By providing records of your transactions and clearly communicating to customers how much they owe, invoices streamline a variety of tasks.
In this article, we’ve discussed the process of creating invoices for your e-commerce business. We also explored five key tips for e-commerce invoicing. Let’s recap them:
- Send invoices promptly to encourage timely payments from customers.
- Keep records of previous invoices for tax and budgeting purposes.
- Manage late payments from customers with detailed files.
- Use electronic invoices to work faster and stay organized.
- Submit invoices to the authorities when undergoing an audit.
Do you have questions about invoicing for your e-commerce business? Let us know in the comments section below!
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