What is an eCommerce invoice?
In general, an invoice is a document that a seller sends to a buyer specifying the quantity and cost of products or services delivered.
An invoicing process is your business’ standard practice of tracking sales and purchases.
An eCommerce invoice is a copy of the same document sent to your customers, either as a printed invoice with their order or as an electronic copy emailed to them.
Why do you need a process for invoicing?
An invoicing process is actually quite indispensable because:
- For the customer, it is an account of the money they pay to the seller, and
- The seller can use an invoice for maintaining their books with accuracy
- During high-volume, high-frequency trading, keeping all invoices on file can help track inventory flow
- It can be used to settle disputes or legal issues
- Invoicing is essential for financial reports.
No matter how tight your invoicing process, there is always room for improvement as technologies evolve.
7 Tips To Improve Your eCommerce Invoicing Process
Add branding and future offers to the invoice
Invoices are everywhere: in your customer’s email, in your files, even in the little plastic jacket on the shipping box.
If you are not using brand colors and your business logo on the masthead, you’re missing out on a branding opportunity. Moreover, info on your next discount offer or sale can be printed on the invoice.
Invoices are great documents for B2B or B2C pitches. They can be used to highlight customized deals and limited-time discounts. If you send an electronic copy, you can even make parts of the invoice dynamic so they quickly grab attention.
Clearly state the T&C on the invoice
Mention the terms of the agreement or the key contract phrases as a boilerplate on the invoice. This is essential both from a legal standpoint and for basic clarity.
The placement can be at the bottom or back of the invoice. Including it is the key. This is not the time or place to skimp on space or printer ink!
This is especially important when you work with large-scale vendors or clients. They typically have their own invoice processing and dues clearance cycles.
If you are entitled to payment within, say, a month from sending the invoice, the agreement terms should be clearly mentioned. This prevents the payer from sitting on the invoice beyond a stipulated time-point.
If your agreement entitles you to claim additional fees against overdue payment, make sure your invoice text reflects that clearly.
Add an eCommerce invoice copy in the package but also email one for luck
Because an eCommerce invoice is an important document, you must take precautions not to lose it or let it stay undocumented. Sending a hard copy with the package is standard practice and some states even demand that a physical invoice be sent.
Emailing a copy as backup is a great practice as it enables both parties to retain a record. Invoices can get lost in transit, but a soft copy prevents any of the key data from being lost.
Mention all dues and payment details
This may seem like a no-brainer. After all, that is what an invoice is for.
But always double-check your accounts when generating an invoice, and be sure to add any previous or pending dues.
Details of the unrealized transaction must accompany such additional charges. This saves time wasted in getting and giving clarifications back and forth.
Similarly, state your account info and the preferred mode of payment on the invoice to smoothen the payments to be credited to you.
Ensure regulatory compliance through your invoicing process
This is where your tax info comes in.
Mention all tax numbers and details mandatory as per the laws of your region. Notably, the applicable Sales Tax and other dues must be mentioned on your invoice.
This makes for less work when it is time to generate your annual or biannual financial reports.
Describe items clearly along with their corresponding tax rates
If your business involves a large and multi-faceted inventory, it is likely you source from multiple regions and suppliers. It is also likely that the items fit into a variety of tax brackets.
So, it is very important to ensure that your invoices bear a clear description of items along with the tax rate applicable.
Also, tax rates change and your invoice should reflect the current rate at all times. Doing this as part of your standard invoicing process saves you many headaches downstream.
Use software to make the process easier
Software that auto-generates invoices with all of the above information, syncs with your accounting tool and updates your accounts to their current state is a blessing.
The accounting software can generate the relevant invoice without any manual input from your side. You can even set up invoice templates beforehand and use them directly while shipping orders.
Primaseller takes the heat off you in maintaining accuracy not just in inventory but also in tracking sales, purchases, and accounting. It works with QuickBooks Online to keep your books updated at all times.
This frees up your time for other aspects of running your business. You create detailed, template-based, professional-looking invoices. Your own effort is minimal and still, you reap big dividends.
If you’d like to rethink your accounting in its entirety, or if you’re just starting out as a retailer, give this retail accounting guide a read.