Receipts, Invoices, and Statements

What do you need and when do you need them? The basics are pretty straight forward, but there are some ideas and opportunities that can be missed. In this article we're writing about some things that should be there and some opportunities worth exploring.

What are the basics?

• Receipts: The obvious part, this verifies the purchase. What should it include? Date, receipt number, the work finished or the product sold, what type of payment (whether it was a full or partial payment), the total amount, and of course the terms for anything pertinent to the sale (how long they have to return the product, how much of a refund they can get, terms of payment plan, etc.).
• Invoices: Maybe they didn't pay everything of even anything up front and now it's time to invoice them for what's owed. An invoice looks much like a receipt, so they will include many of the same things. You'll want to include details of the product or service provided. Of course, given that the invoice is usually a larger format you'll be able to include more detail. That is of course if you want to... You'll definitely want to include the date, invoice number, when the payment is expected and any terms that may have been negotiated, as well as total amount.
• Statements: We've made it to statements. These should include a history of the account activity, sales and or invoices, payments and credits, balance due, and aging. Including the terms once again isn't a bad idea either. Things to consider would be the time frame for aging. Do you stick with the traditional 30 days, shorten it to 15, make a hybrid? Regardless this should be consistent and laid out on the invoice and/or receipt. Less detail is typically needed on a statement, but you may find that your particular customers like having more detail. Experiment and figure out what works. You obviously want this process to be smooth, so anything that helps should be included.
• What happens when they don't pay? This can be a tough subject to talk about, but we recommend having your policy on the invoices and statements. Hopefully this conversation doesn't happen too often, but being prepared means everything is in place and that there will be less worry if and when the issue does arise. It's a good idea to decide beforehand whether or not you're willing to send someone to collections. If yes, then who will you use and what are your parameters? Implementing good practices will hopefully help to eliminate any issues.

What to remember: Think outside the box, do your research, be open minded, and try something new.