Contractor payroll involves tracking and billing for your time. It’s important your invoices are understandable, easy to process and meet your contract requirements.
You’re more likely to get paid on time if you submit a structured invoice that leaves nothing to the imagination. So, what makes a clean, crisp, and effective invoice?
1. The format of your invoice may vary by industry, project, or client requirements but you should always include the following:
• A clear label – name it as an invoice.
• Your name and full contact information.
• Client reference number (purchase order number, account number, etc.).
• Client name and complete contact information.
• Date of the invoice (especially useful if your work with a particular client is continuous).
• Invoice number – ideally, assign codes to each client.
• A breakdown of the products and/or services you provided, with a succinct description of each one. Ideally, the invoice should have columns for each section: job description, date of assignment, date of completion, the rate of pay, and total amount due.
• Rates and fees to be paid.
• Total amount due and discounts, if they apply.
• Your digital signature (optional).
• Registered GST number if applicable.
To avoid billing conflicts, always have a signed agreement with each client on file that sets the billing cycle process and terms. If you haven’t set a billing cycle, state on the invoice that payment is requested by two weeks after the day you send the invoice.
2. There are several Word doc templates available for creating an invoice. This makes it an easy, low-cost process. However, managing accounting tasks such as time entry, invoicing, and collections requires accuracy, tracking, and follow-up. It’s also time-consuming. To eliminate unnecessary stress and instead dedicate your time to billable work, you may want to consider a more comprehensive service option like The Detail’s contractor payroll services.
3. Try to offer an incentive to every customer who pays on time. This might be a discount for paying in full, or a payment plan option if the work is part of a more significant project. You could also charge clients for paying late (e.g., between 3% and 5%) if you wish.
4. Send your invoice out immediately, right on time, especially if it’s for a one-time job, to avoid stretches of unpaid time. Online contractor payroll services can help you send invoices quickly and cost-effectively, and keep track of it all for you.
Regardless of whether you hire a contractor payroll service or do it yourself, you need some sort of reliable invoicing system for your business. You need to invest time and resources to ensure your invoicing process is consistent. Without this, you won’t be able to collect your payments on time, which can severely impact your profitability and your customers’ loyalty.
If your struggling to get paid on time, then talk to us about your contractor payroll, we can arrange the entire process, and make sure you get paid on time every time. Contact us now.