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When it comes to finding a reason to delay payment, there is little doubt that the imagination of Irish companies is fertile. All the more reason, therefore, that suppliers should make absolutely sure they don’t hand any ammunition to payment-shy customers by sending defective invoices.
Aside from issues around payment, there are also numerous legal items that must go into any invoice, particularly around VAT. There are also areas of best practice that help with the effectiveness of the document in terms of encouraging prompt payment. Remember that in addition to being a legal document, your invoice design and content reflects on your company’s image to customers so close attention to detail is due.
So, are you sure your current invoice design covers all the angles? Perhaps it’s time to look again and revise your current invoice, particularly if it is leading to issues around non-payment.
Here’s a checklist of information must appear on your invoice:
Company Name Company Logo Address and contact details – The full name, address of you or your business (whoever supplied the goods or service being invoiced for) Phone, Fax, E mail Invoice Number – This should be a sequential, unique number Invoice Date - The date should be the earliest possible according to contractual terms. If you are registered for VAT it should be no later than 15 days after the end of the month in which the goods and services were supplied. VAT number Invoice To – The correct customer name and address (have regard to subsidiary and affilitate names that may not be the correct customer). This should be positioned that is easily folds into a window envelope. Avoid including other information appearing that could cause confusion Delivered To – Make sure the customer is clear where the goods were delivered or where the service was carried out. Customer Purchase Order (PO) Number – Usually mandatory in larger companies, invoices will often be refused payment if this is not quoted. Name of relevant person – This is usually the manager who made the purchase requisition and helps validate the payment on the customer side. Payment Terms – Best practice is to quote a specific payment date such as “Payment due on 22th September” rather than that say “Payment terms 30 days net”. Delivery date Method of dispatch Delivery or service docket number Goods/Services Description – Make sure there is adequate space Quantity Price Discounts – Those that apply must be clearly described Total Breakdown of different VAT rates including zero rate Total Net amount of goods/ service Total VAT charged Total Due – Clear displayed in the bottom right corner of the invoice For Export to other EU countries – Include your customer’s VAT No. Retention – For goods delivered there should be a clear reference your retention of title clause on the front of the invoice
You may print some or all of your terms & conditions the back of the invoice.
Where possible use a white background – this makes it much easier to copy, fax or email.
It is best to put the direct number of the accounts department on the invoice. Otherwise, if you put the main number on your invoice you are simply duplicating work for your receptionist and your accounts receivable.
Invest in design. Your invoice should be as clear and as attractive as possible. Human nature being what it is, invoices that look “difficult” will tend to be left to the bottom of the pile for processing.
Where possible, avoid technical jargon – this makes it easier for accounts people who are not versed in technical matters to identify the goods and pass for payment.
Of course the first rule when making up the invoice is to make sure all the information is correct: this means correct descriptions, correct quantities and, above all, correct prices.