Ever since the first one was carved into a clay tablet thousands of years ago, collecting for one’s services has involved an itemization of services, terms and prices.

The invoice was born. And remains with us, in some form, to this day.

Sure, we’ve all created and issued an invoice at some point in our business lives.  Probably still doing them.  Or, if you’re smart, have passed on this task to someone who can focus on it full time.

Beyond wanting to collect the cash for your services, what is the value of an invoice?

  • It is a record of the transaction between you and your client.
  • They are a critical element of accounting and internal controls and audits.
  • Their creation allows for approval by the responsible manager.
  • They outline the details of terms, unit cost, shipping, handling and anything else you agreed to with your customer.

Now that we know what it is, let’s ask the next question: what’s your process?

Remember invoices go both ways—they aren’t just issued by you, you have to pay the invoices (bills) from your suppliers.  And that takes a process.  An invoice is usually the heart of your accounts receivable (A/R) and accounts payable (A/P) processes. It starts when you receive (or issue) an invoice and finishes when payment has been made and recorded.

The most important elements of an invoicing system are:

  • Data input and verification. This includes everything from product and service information, prices and quantities as well as customer information.
  • Billing codes. This will help you track and categorize products and services.
  • Payment tracking. How much is due when and from who.
  • These are sensitive data that must be kept safe.

Invoices and invoicing are all about cash flow.  Get a handle on that, and you will be able to build and manage your business successfully.

For more on invoicing, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their finances from the back office to the boardroom.

*photos courtesy of Unsplash