Every small and medium sized online retailer is a multi-tasker with many business owners managing the end to end process from procurement through marketing, sales and fulfillment. Billing is a crucial part of every sale and it’s tempting to think in those early days that all you need to do is take an online payment and leave PayPal to manage the administration but it’s not long before the lack of a proper invoicing process starts to hurt and the avoidance of administration today causes headaches tomorrow.
The simplest solution that many small business owners employ is to create manual invoices in Excel or Word but sequential numbering, calculation of taxes due and assignment of transactions to the correct accounts quickly becomes challenging. The introduction of accounting software brings with it its own advantages and disadvantages for the small retailer.
In general, small business invoicing methodologies work against them in many ways, including the lack of a professional appearance, facilitating timely payments, and optimising cash flow. All of which are critical to a small business owner because they help sustain and grow results.
Below are our top 10 invoicing best practices as well as key considerations for using invoicing as a means of marketing your business, speeding up payments and improving your cash flow:
1. Use multi-channel sales invoicing
Few online retailers sell through a single sales channel. With webstores, marketplaces and other integrators being essential routes to market for most businesses, managing the billing process can require you to log in to multiple systems to manage your orders. Each system works differently and this results in wasted time, confusion and errors. When this becomes a challenge, consider a software solution that connects with all of your webstores, marketplaces, couriers, popular accounting systems and other popular software systems and allows you to work from a single interface.
2. Create professional templated invoices
Not every small retailer is a graphic designer but invoices should follow a consistent, easy to read format and contain all of the necessary information for your customer and for your own business administration. Thankfully software solutions (including our own) exist which enable you to create invoices from templates using simple easy to use tools. is the inclusion of templates to help. And with a simple, uncluttered layout, customers can find the information about who is billing them, why, for what, how much for, and where and when to pay faster. And the faster they have that information, the quicker you will get paid.
3. Show a clear brand identity
Often when selling via marketplaces, the customer’s first experience of your branding and corporate identity is your invoice. If your invoice is generic and unbranded, you lose out on that crucial opportunity to enable the customer to connect the product they bought and the service you provided with who you are. Your invoice should also provide all of the information necessary to promote your company, including logo, website address and your webstore. After all, you want them to shop there next time saving you marketplace fees and enabling you to build customer intimacy, build loyalty and encourage repeat buying. If your invoice is your one chance to communicate with your customer, why waste that chance by simply billing your customer. This could be an opportunity to add a few brief marketing messages related to new products, promotions, special offers, loyalty programs, a link to a customer survey to help you gather feedback or any other other information would help you to improve the customer experience.
4. Adapt invoicing styles to sales channels
You’re probably selling through a webstore as well as Amazon and eBay and possibly through more sales channels besides. So it’s important to be able to easily set up different invoice templates for each of your trading companies and sales channels to tailor the look and feel for each channel.
5. Incorporate payment methods
Providing more ways to pay you is always a good way to speed payment because it gives your clients the options they may need for managing their own cash flow. Paypal is the default for eBay and Amazon is efficient at managing payment methods for you but invoices generated for your webstore should provide alternatives including where appropriate, PayPal, credit and debit cards and bank transfer.
6. Communicate your company policy
As we said earlier, your invoice may be the only item of correspondence your customer receives from you throughout the transaction. So it provides you with an effective means of communicating your policies and procedures as they relate to payment, returns, privacy and more. Your policies prove a framework for engagement between you and your customer and they should be written down in the form of an agreement or contract between you and your client so everyone is on the same page. This agreement should be part of or appended to your invoice and its acceptance should be part of the agreement to buy and sell. Where appropriate, both you and your client might want to have a signed copy of this agreement.
7. Stay compliant and make life easier with sequential numbering
HMRC requires companies to maintain sequentially numbered invoices as part of your company records. Using a numbering system not only helps with compliance and record keeping, but it also can be a point of reference to help your client when communicating with you about a specific invoice and to maintain their own records. eCommerce invoicing software will typically a feature that is included and is done automatically for you.
8. Produce invoices in multi-use and multi-media formats
Depending upon your sales channel and the methods used by the customers to make their purchase, you may need to create invoices in formats which can be sent to them in different ways and via different communications mediums. We believe it’s best to create invoices as PDFs which you can print or send by email from within your invoicing software. Or have the PDF invoice sent automatically to the customer direct, using eBay and Amazon.
9. Automate VAT Receipts
If you sell products or services of different types with different VAT rates or sell in more than one country or state, managing VAT or Sales Tax can become complex, error-prone and potentially costly. Make sure that you have the means to automate your VAT billing and receipts.
10. Automate your invoices
Invoicing is administration and most of us don’t enjoy it and actively avoid it. But as well as being a very necessary tool that delivers the cash you need to thrive and grow your business, invoicing can also be seen as a unique and essential medium for communication between you and your customer. Automating the process removes the hard work and affords you the time to leverage invoices to deliver tangible business benefit and facilitate valuable customer interaction.
ChannelGrabber can help with its templated, customised, branded invoices;. You'll also benefit from custom workflow, automated VAT receipting and integration with your webstore and the leading online marketplaces, couriers and accounting solutions.
And don't forget, ChannelGrabber's multi-channel ecommerce software helps you to automate the management of listings, stock, orders, shipping and messaging so frees up your time to focus on making more sales!