Invoice Best Practices: Tips for Clear and Professional Invoices

Effective invoicing is crucial for maintaining a healthy cash flow and fostering strong professional relationships. In the United States, small businesses are grappling with a colossal $825 billion in unpaid invoices, equating to 5% of the entire U.S. GDP.¹

Implementing best practices in invoice creation can help to minimize late payments and enhance your business's financial stability.

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Why Invoice Best Practices Matter

• Ensuring Timely Payments: Clear and accurate invoices facilitate prompt payments by providing clients with all necessary information upfront. This reduces the likelihood of disputes or delays caused by missing or incorrect details.
• Building Professional Relationships: Professional invoices reflect your business's credibility and attention to detail, instilling confidence in clients and encouraging ongoing partnerships.

Professional Invoice Best Practices to Follow

Essential Information to Include

Ensure your invoice contains the following key elements:

• Your business name and contact information
• Client's name and contact details
• Unique invoice number
• Invoice date and due date
• Detailed description of goods or services provided
• Total amount due
• Payment terms and methods

Including these details ensures clarity and reduces the potential for payment delays.

Structure Your Invoice for Clarity

Organize your invoice logically, grouping related information together. Use headings, bullet points, and tables to enhance readability, making it easy for clients to review and process the invoice promptly.

Set Clear Invoice Payment Terms

Define explicit payment terms, including due dates, accepted payment methods, and any late payment penalties. Clearly stating these terms helps manage client expectations and encourages timely payments.

Best Practices for Sending Invoices

Send invoices promptly upon completion of a project or delivery of goods. Utilize electronic invoicing methods, such as email or invoicing software, to ensure swift delivery and provide a record of transmission. Confirm receipt with the client to prevent any misunderstandings.

Best Practices to Remember for International Invoicing

Agree on the Invoice Currency Before Invoicing

Discuss and confirm the currency to be used in the invoice with your international clients beforehand to avoid confusion and potential delays.

Factor in Currency Exchange Rate Changes

Be aware of currency fluctuations and consider how they may impact the payment amount. Clearly state in the invoice whether the client is responsible for any exchange rate differences.

Provide a Local Account Number for Receiving Payments

Offering local account details in your client's country can simplify the payment process and reduce fees. Wise Business allows you to open local account details, enabling you to receive payments like a local and facilitating faster transactions.

Common Invoice Mistakes and How to Avoid Them

Missing Invoice Details

Omitting essential information can lead to confusion and payment delays. Always double-check that all necessary details are included before sending the invoice.

Delayed or Incorrect Invoicing

Sending invoices late or with errors can disrupt your cash flow and damage client trust. Implement a systematic invoicing process to ensure accuracy and timeliness.

Unrealistic Payment Terms

Setting impractical payment terms can strain client relationships and result in late payments. Align your payment terms with industry standards and discuss them with clients to reach a mutual agreement.

Unexpected Currency Exchange Costs

Failing to account for currency conversion fees can reduce your profits. Use services like Wise Business to manage multiple currencies and minimize exchange costs.

Discover Wise Business: The Easy Way to Manage Business Finances in Multiple Currencies

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. You can also send money to 140+ countries.

Get started with Wise Business:
Easy to set up, easy to use

Wise Business offers a range of features to streamline your invoicing and payment processes:

• No monthly fees
• International payments at the mid-market rate
• Integration with invocing software, such as QuickBooks, for easy account reconciliation
• Designed to manage multiple currencies all in one place
• Receive payments like a local with major currency account details
• Hold over 40+ currencies

By using these invoice best practices and leveraging tools like Wise Business, you can create clear, professional invoices that promote timely payments and strengthen your business relationships.

Sources:

1. Arrears Debt | Blog - Unpaid Invoices: 10 worrying statistics for SMEs in 2023

All sources checked February 2025.

	Editor & Business Expert:
	Panna is an expert in US business finance, covering topics from invoicing to international expansion. She creates guides and reviews to help businesses save time and make informed decisions. You can read more useful business articles on her author profile.