As a business owner, you need to issue invoices regularly. But if you are a sole trader, you will be responsible for every aspect of your business operations. Contrary to popular opinion, creating a comprehensive and designed invoice is super easy!
A sole trader invoice is an important financial tool and lets you clarify payment terms. There are multiple options when it comes to choosing a sole trader invoice template.
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If you are confused about the entire process, don’t worry; we have it all sorted for you! Read this post to become an expert in managing sole trader invoices.
Why Should Sole Traders Use a Professional Invoice?
Satisfying the demands of clients is essential for every sole trader. But, how to process an invoice is a question that can confuse you?
Well, designing one is not a difficult task. An invoice reflects your professionalism and sincerity towards your work. Thus, a sole trader invoice must be flexible and such that customers can easily skim through it.
It would be best if you made it a point to outline the work done and the amount charged for making it easy for your customers to pay you upfront.
What Should You Add In A Sole Trader Invoice?
When you complete your job, it is followed by the payment process. A well-made invoice can help you get faster payments and maintain a positive cash flow. You might think that all you need to do is add your services, date, and signature, but that is not the complete truth.
While it is not that complex to make, it is not that simple too. Invoice acts as binding for both parties and authorizes the business transaction. Thus, you must make it accurately and double-check it to avoid any issues.
Here is what you must include in a sole trader invoice.
- Invoice number
- Invoice date
- Client as well as your business name
- Communicating addresses for both parties
- Add the phone number, fax number, email address, and other relevant details
- Business registration number as this authenticates your business identity
- A job list and add the description of the product delivered or services offered to eliminate any confusion
- Tax details
Besides these parameters, you must take care that you mention your payment terms and conditions clearly in your invoice. These include:
1. Payment Due Date
Double-check if your invoice has the payment due date mentioned. In this manner, your client is less likely to miss out on the payment date.
2. Payment Method
Try keeping it as flexible as possible to avoid payment delays from the customer’s end.
3. Late Fee Policy
Having a late invoice payment fee policy in place will help you get payments faster and eliminate instances of delays.
4. Early Payment Discount
Like late payments would lead to an extra fee, it would be a great idea to give your customers a discount if they pay before the due date. This will also help you build a long-term relationship with your clients.
Additional Tips To Create A Sole Trader Invoice
Besides the above information, you can follow these tips to enhance your credibility as a professional. Your invoice reflects your brand statement, and implementing these tips can strengthen your foothold in the market.
1. Add Business Logo
Your invoice represents your brand, so you must add your business logo and name to be visible clearly.
2. Invoice Promptly
Ideally, you should raise your invoices as early as possible. A delay in invoices can lead to unnecessary delays in payments too.
3. State Clear Payment Terms
Make it a point to clearly state your payment terms in your invoice so that your clients can easily understand them. Likewise, if your payment method is different from what your client expects, make sure you mention that.
Besides, your description list should be organized and should have all the required details your clients may need. Another important thing is to mention the services offered and the rates charged for each. In case it is a product, its quantity should be mentioned.
4. Automate Your Invoices
You can choose to send your invoice through electronic mail or an automated system. This ensures that your invoice is sent immediately as you deliver your services. Moreover, your customer gets access to the original copy of the invoice if you send it through email.
But, you must set remember that not all of your clients will be punctual and have the same business ethics. So, it is recommended that you follow up with them in a smart manner. If there is a delay in payments, make sure you give a polite reminder to speed up the process.
Source: ICONOS
Bank Information To Be Included in A Sole Trader Invoice
The most common method of receiving payments is bank transfer. Luckily, most clients prefer this kind of method as it is easy and safe. However, make sure you mention the following details when you make a sole trader invoice.
- Full name
- Account name
- Account number
- Invoice number for future reference
It is suggested that you also add a polite note at the bottom and thank your client in advance for the business transaction. Appreciation goes a long way and maintains a strong foundation. As a sole trader, the tips mentioned above will help you create your invoice online easily.
Wrapping Up
This post discussed how a sole trader invoice could benefit your business and the parameters you must keep in mind before sending one. Be it a proforma invoice in business or a regular invoice; these tips will let you simplify the whole process and get payments faster.
Still, looking for the right invoicing solution? Then, let us help you find one!
Anu Singh has worked for known SaaS firms and holds extensive expertise in breaking down technical topics into digestible copies. Her content speaks volume about her creativity and knack for exploring new avenues. When not writing she likes to read novels, hone her editing skills and stay abreast with the latest industry trends.
