Small Business: How To Invoice
VideoJug has called on the advice of Vera Hughes, the co-author of 'Teach Yourself: Setting Up A Small Business' to show you how to invoice properly. This is an important aspect of business, so learn how to do it properly with VideoJug's help.
Step 1: Your Invoicing system
If you are issuing invoices, you need a system for sending out them out promptly, within one or two days of the jobs completion. You might have agreed to stage payments, so mark the dates in your diary, or instruct your computer program of when these should be generated.
Step 2: What the law says
According to UK law, these are the elements which must appear on an Invoice:
1. The name and address of the supplier, this being the person invoicing.
2. The name and address of the customer.
3. The invoice date.
4. The invoice number. If yours is a very new business, start with number 101, rather than 01, otherwise you are telling the world that this is your first ever invoice.
5. An order number, if you gave one when placing the order. Always check the invoice relates to that order.
6. The Unit Price per article.
7. The final net total, so you know the exact amount due, not including VAT.
8. It's wise to show all discount details, however you must show the discount rate
9. Postage, Packing & Carriage if applicable.
10. The final net total, so you know the exact amount due, not including VAT.
11. The amount of VAT at the appropriate rate - which currently stands at 17.5% in the UK. This is only payable if the supplier's business is VAT registered.
12. The total including VAT.
13. The company's VAT registration number.
14. The terms of payment.
Step 3: Follow up
If there is a discrepancy in the calculations it is important to follow this up promptly or else you will risk running over the time allowed for payment. Once all details have been checked and agreed, pay the amount due within the agreed payment terms. Most small companies collect all their invoices and pay them at the end of the month.
If invoices are not paid, it is possible to be charged interest on the outstanding amount. Work systematically, and get a good invoicing system up and running - it can be costly if you don't.
