Invoices are a widely used document, in all kinds of sectors, and are a simple way for freelance staff to bill for work they have done or for limited companies to keep track of their finances.
If you need to invoice for work then there are a number of boxes which your invoice must tick to be legally binding. Many of these requirements may seem obvious but a failure to adhere to them could make a document worthless.
First and foremost, an invoice should clearly state that it is an invoice. This is as easy as titling it with the word invoice, so make sure this is done first.
Other invoice essentials include your company name, contact information and address, as well as the same information for the customer you are invoicing. As well as this, you must include a clear and accurate rundown of the services or goods you are charging for, and over what time period you provided them.
For instance, if you are a painter and decorator charging by the day then your invoice might state that you provided painting services for two days and wallpapering services for a further day, between the dates June 3rd and June 6th, and that your daily rate is £100.
Include your chargeable rate and clearly state the amount you are charging, as well as any VAT if it is applicable.
In simple terms, an invoice must show what work you carried out, who for, when you did the work and how much you are owed for it. In addition, you may also want to include payment terms, for instance that you expect to be paid no more than seven days after the invoice is sent.
The most important aspect of any invoice is accuracy, as filing an incorrect invoice might not be flagged up immediately and could see you in financial hot water while errors are being put right.
So what should you do if the payment date passes and you have not received the money you are owed?
Firstly, get in touch with your client by phone or email to get to the bottom of what has gone wrong. The issue might be an easily fixed oversight on their part, or the problem might lie with your bank. Sending a reminder can keep things on an even keel but still make it clear that you expect to be paid as soon as possible.
If problems persist and you are left in financial difficulty following a lack of payment, you might be entitled to take legal action, as long as your submitted invoice was totally accurate and is not the reason for any delay.
This post was provided by Hattons Solicitors in St Helens, Widnes and Leeds, England. Hattons’ specialist department of commercial solicitors work with a number of businesses, from private companies and partnerships to sole traders, providing them with commercial law advice to fit with the needs of their business.