Today’s article on The Definitive Guide To Invoicing For Online Store Owners is brought to you by Katy Mrvova – Marketing Manager at Sufio.com.
Let’s welcome Katy in our blog, and learn from her invaluable experience!
Building an online store from scratch requires you to be an all-in-one person. You’re a CEO, sales manager, marketer, designer, dispatcher, accountant… This can get overwhelming so a little help is always handy.
You might not like it, but invoicing is necessary for every business. What’s great is that you don’t have to know much about accounting to get it right. Today we’d like to share with you some tips for you to know how to go about your invoices.
So, what are invoices in the first place?
Invoices or bills are legal commercial documents issued by a seller to a buyer to record any kind of sale. They are also used for accounting and tax purposes and might serve as inventory checks. In short, invoices are important for you to keep track of all your financial transactions.
As far as online retail is concerned, invoices are usually sent out after an order has been placed or after a product has been shipped to the consumer. This document is to confirm the customer’s order, showing the products he has ordered, quantities and their prices.
Why do you need to issue invoices?
1. Getting paid
First and foremost because you want to get paid for the products and services you provide. You can set a due date and state it on the invoice so that the customer knows exactly how much time he’s got left to pay you. If he fails to do so in the given time period, you can send them reminders. If you have an online invoicing software you can even get paid really fast with just one click of a button via PayPal or credit card.
2. Keeping records
An essential purpose of invoices is to keep records of all your sales and purchases. To put it very simply, it is important to know how much your store is earning and spending. This gives you great overview of your business’ financial situation. Also, it is important that you keep an eye on your debtors – archiving all your invoices will help you sort out paid from the outstanding bills. This takes us back to the first point: you don’t want to lose your money.
3. Legal matters
An invoice serves as an evidence of the sale. It is, after all, an official document that both you and your customer have in possession to prove (when necessary) that the purchase and the financial transaction happened. This is vital. What if Customer A refused to pay you? And what if Customer B claims he did not receive the order? Nobody wants to get into trouble with lawsuits.
Also, every business can be subjected to financial audit. If you want to avoid fines or other penalties, keep your invoices in order and sequentially numbered in case your national tax authorities came knocking on your door asking questions.
Be sure to be sending professional looking invoices. Find your own unique design. Add your logo, your stamp, signature or social media buttons to your invoices. It might not seem much to you, but even invoices can be used as a marketing tool. Everything that represents your store builds your brand and your reputation. And even when your online store has a beautiful design, your products are awesome and arrive beautifully packed, wouldn’t it be great if a customer got a professional document instead of a scrap of paper? It shows you care for the details and, by extension, for your customers.
What should your invoices include?
By default, your invoices should include the following:
1. Its own unique number
2. Your business name and your address details
3. The customer’s name and address
4. Issuing date and due date
5. List of purchased products, their description (optional), quantity and prices.
6. Contacts: phone number and/or email address
7. Order number
8. Payment method and bank account number (not necessarily)
If you are a VAT registered company you must display the amount of VAT you charge on each product or service and your VAT registration number. When selling to businesses, it is mandatory to include a company/business number, both yours and the customer’s.
In order to make sure you included all the necessary information, we strongly recommend checking your national / local accounting standards.
Different countries, different customs
Be careful when you’re selling abroad as in each country there might be different tax laws and rules. Each country has specific legislative acts which is why you should know what sort of policies there are in the country you want to sell to. It’s very important you familiarise with these differences before selling internationally as there might be different amount of taxes charged or different things to be included on invoices.
Not too long ago, invoices transitioned from paper-based to E-invoicing. This surely must have helped save many trees! Other than that, invoices sent by emails are also faster, cheaper and more effective. However, you can get more than just that with a good invoicing software.
There are many to choose from, some free of charge, some with a monthly fee. We recommend going for one that offers partial or, even better, full automatisation of invoicing. This means that your invoices will be created and sent to your customers without you having to lift a finger. All you have to do is set the app and sync it with your store. This saves you plenty of your time and it is much easier to store, manage and edit all your documents.
So, by now you should know a bit more about invoicing. It might seem a boring stuff to you but, whether you like it or not, it is a necessary one. And, with a little help from the invoicing experts, you’ll be able to make your accounting and billing easy and hassle-free. Sufio, an invoicing app for Shopify online stores, is a great choice for you. Try it for your store for 14 days free and invoice your customers easily and effortlessly.
We feel honoured to have Katy’s insights featured in our blog, and we are incredibly thankful for the knowledge she has shared with us.
About the Author: Katy Mrvova is a Marketing Manager at Sufio, the first automated invoicing tool for Shopify stores. Sufio has over 3000 happy customers all over the world and is still growing. In 2016, the Sufio team is introducing newly designed invoice templates with many customizing options and several new features. Sufio.com