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• Why Creating An Invoice In Word Is Bad for Business

Money coming in. Exciting. Need to invoice? Sending invoices as a Word document seems like a logical and convenient option.

WRONG...

An Invoice is more than just a piece of paper or a file. It is a document representing your services or products. Would you be surprised to know that sending an invoice as a Word document can compromise your business and make you look unprofessional?

Word Invoicing Makes You Look Very Unprofessional

Word invoices make it seem like you have a “Just give me the money already!” kind of attitude. This of course may be a long way from the truth… BUT

This is the perception that your clients may develop about you - unless you rethink your approach.

Imagine your client providing a Word file as an evidence of their expenditure. This file can be edited at any time and any amounts or descriptions can be changed. How trustworthy is it?

Not enough... not if you want to build a good ongoing relationship with your clients.

The bottom line is that there are several major drawbacks to writing invoices as a Word document:

• You will be using the same templates as thousands of other businesses - which makes you look cheap and nasty.
• It is easy to get in the habit of sending out invoices without your business logo and colours.
• You need to remember to add specific crucial information (document date, due date, invoiced items, accurately reflected taxes, consistent invoice numbering, reflecting all the payments that are already made on the invoice) that would be different for each invoice.

Having any or all of these drawbacks in your invoices can lead to you gaining a very unprofessional reputation.

Compliance Requirements

Some would say: “You do the work, you invoice for the work...isn’t that enough?”

An insane amount of attention to detail and consistency of execution are required to produce a set of professional invoices that meet all compliance requirements.

Do you want to spend hours pouring over your Word document invoices, stressing over making sure that you dot every single ‘i’ and cross every single ‘t’?

Table Of Professional And Compliance Requirements

Below is table outlining the main professional and compliance requirements that should be followed when constructing an invoice. All of the listed points are incompatible with Word.

Table: Professional and compliance requirements for invoicing

Professional Requirements (Current Best Practice)	Compliance Requirements
Unique Invoice Number, means that you do not issue different invoices with the same number	The seller's identity (business name or legal name)
Payment details or Online Payment Options	The date the invoice was issued
Due Date for the Payment. “Due on receipt” is open to too much interpretation and is vague - put exact date or exact number of days from the invoice	A brief description of the items sold, including the quantity (if applicable) and the price
Payments made (if any) reflected on the invoice	The seller's Australian business number (ABN), needs to be clearly visible as your client will need to check that your ABN is legitimate and your GST registration status is accurate (you cannot charge GST if you are not registered for GST)
Never send an editable invoice, it is not your client’s job to edit your invoice	The GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly one-eleventh of the total price, as a statement such as 'Total price includes GST'

Where to from here?

When it comes to professional and compliance requirements, using Word for invoicing is CLEARLY the wrong way to go.

So what is the right way?

Create a Xero file and Invoice through a professional accounting program that we can provide or use the free option below.

Free Online Professional Invoicing Programs

There are a number of excellent free Invoicing Software programs available at the moment that address all of the issues outlined in the table. A lot of them have free mobile apps and integrated credit card payment systems.

Software developers are bending backward to make your life easy. So, why not take advantage?

For example, you invoice today and getting paid via credit card on the spot? How does that sound? Can your Word invoice do that?

Just google “invoicing software programs” and choose one that you like.

To make it even easier for you, we have written a manual on how to be compliant with Australian rules. It teaches you step-by-step, with screenshots, so you don’t miss a thing.

Being consistently professional and compliant has never been easier.

One Final Thing - Invoicing Etiquette

A way to further distinguish yourself from the crowd is to adopt best practice when it comes to business etiquette. Imagine how happy your clients will be when EVERY INVOICE YOU EVER SEND

• Is sent on time
• Is easy to pay.
• Is sequenced correctly
• Is emailed.
• Can be easily added to a statement

You will need, at some point, to consider integrating your invoicing system into your overall accounting process. If this does not occur, your business will not be able to grow.

Are you ready for serious growth? We will help in establishing your accounting files and systems, and to make your invoicing professional, compliant and fully integrated into your accounting processes. Please give us a call today.

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