It is said that many clients avoid paying on time because they don’t get clarity on the purchases they have made or the services they have availed.
To provide that clarity, you need to choose the easy method to personalize your invoices through an itemized invoice template for each and every customer.
You must ensure that every single detail is itemized in the invoice you send to the client and ensure that they know what they are paying for. So, what is an itemized invoice template? And what are the benefits of using an itemized invoice template? Let’s go through each of them step by step.
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All You Need to Know About an Itemized Invoice
An itemized invoice list template is one type of invoice template that allows you to break down the individual items and/or Goods & services. Such invoices make it easy for your clients to track your hard work and allow you to add detailed explanations along with the cost for each item, and then the total added up at the end.
The itemized invoice templates also help you keep the records and track the items and prices for accounting purposes. And you can also monitor it for your inventory in case of product purchase. On the other side, clients also get to observe how they have spent their money.
The clean and well-presented professional detailed invoices create an impact on customer’s minds. They get what they are looking for and it is also said that happy customers always come back.
Want to know what an itemized invoice looks like?
Well, these are the elements that an itemized invoice consists of.
- Invoice date
- Invoice number
- Businesses’ details i.e. name, address, phone number, email
- Clients’ information i.e. name and contact information
- Purchases made
- Line items
- Totals and Subtotals
- Applicable taxes (Sales Taxes/GST/VAT)and extra charges
- Final payable amount
- Due date
- Payment terms and conditions
- Payment instructions, such as accepted payment methods and currency
Note: You can explain your preferred payment method. For example, do you accept payments online, offline, or both? Also, explain if you have charged them on an hourly basis or by the task. The important thing in these invoices is that you should list down all the individual items (products or services).
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Pay Little Attention to the Layout of Your Invoice
An invoice that is itemized should be carefully designed and organized so it is easy for your customers to understand and convenient for you to audit in the future.
Using the invoice generator or invoicing software gives you the freedom to organize all the information in the online itemized invoice templates, which are known as free fillable templates, quickly and easily.
However, you always have to pay little attention to the layout you choose for your billing template. As it plays a major role in generating a powerful impression on your customers. The few things that you need to consider while choosing a layout are:
- Color combination of the layout
- Graphics and design style
- Stylish fonts and texts
- Realistic elements
- Editable rows and columns
- Space for extra notes
Once you are sure about the elements and the layout you should look for the itemized invoice template file format. (for example, Google Docs, Word doc, Google Sheets, Excel, or PDF template).
As soon as you finalize everything, you need to start editing the itemized invoice template according to your business requirements.
Benefits of Using Itemized Invoices
Itemizing products and services provided can help you increase the scope of your small business work. When it comes to itemizing products and services, it has the potential to strengthen the relationship with the client.
The clear-cut instructions indicated in the itemized invoice templates will help you gain the trust of the clients.
A well-written and itemized invoice can make a huge difference in getting paid for the hard work you have put into any service.
Moreover, it can automate repetitive tasks and save time for your accounting authorities.
Tips to Follow While Itemizing the Invoice for More Transparency
Itemizing products and services are not that complicated as you might think, but in fact, it is an extremely simple process and it depends on a few common tips to follow.
Let’s see the major ones that will help you list out the products and services professionally and effectively so that your customers pay you instantly.
Write direct and logical descriptions
Most of the customers face issues related to payment methods, and confusion related to the description they get. So, it is crucial that you include the important details with the logical description in a way that the clients understand the charges they are paying for.
In short, everything should be crystal clear and should give your clients step-by-step instructions for paying the bills. It is advisable to write instructions in simple English language that every customer can understand.
Break Down Large Projects/Tasks into Small Portions
Many times, a business owner has done two or three projects for a client or might be working on large projects and he/she might find it tough to include everything in the itemized invoice template.
In such a case, it is advisable that you break down large projects and/or tasks into small sections including other sub-tasks. Basically, splitting the project/services into multiple entries gives clarity with the following things:
- The exact description for the work
- The costs for the tasks/services
- Add-ons services if performed
The other core advantage of breaking down each task of the project is that the client may extend the work contract based on the clarity they got through the detailed invoice.
It is better that you start dividing the project right from the beginning. So, it doesn’t become so complicated at the later stage.
This should clear your road for getting payments.
Itemize the Project/Service Costs too
Itemizing the cost of the particulars with the description is crucial too. By breaking down the total cost of the invoice template, the client will be able to calculate the grand amount with a clear understanding.
Usually, you should include some of the following:
- A unit amount of services/product
- Time based-charges, i.e. hourly rate
- A rate per unit/service
You must provide as much information as possible for the client so that they can understand the exact bill you have provided.
What’s an itemized receipt?
The itemized receipt is the kind of invoice template that includes an itemized list of explanations and prices of the products/services that give step-by-step points to the clients. It also includes each and every detail about the item or service the client should know.
Who should use an itemized invoice template?
Itemized invoices are the ideal invoice types for the people who are working on a contract basis or freelancers. Not only them, but these invoices are also ideal for the people who are working on big business projects or selling lots of products to one client.
When should I submit the itemized invoice?
Sending an invoice will completely depend on the agreement you have with your clients, but most commonly, the ideal time to submit invoices is as soon as the work is done and/or at the end of the month. Business owners also send invoices every fifteen days, if they are doing hour-based work to get paid.
What will happen after I submit the itemized invoice?
After you send your invoice, you can assume that you will get paid before the invoice date. If you do not receive the payment by the specified date, you need to check with the client to find out why it is still unpaid.
Create Professional Invoices Online Easily and Keep On Top of Your Finances
InvoiceOwl is a feature-rich invoicing app that helps small businesses, freelancers and contractors to create invoices on-the-go and get paid quicker!
Ultimately, the free itemized invoice template from the invoicing software —InvoiceOwl, will save you from breaking professional relationships and bond new ones too.
This practice makes things clear to both parties and keeps the transaction transparent. Other than that, the InvoiceOwl app helps you create unlimited invoices for your small business without breaking a sweat.
We hope this blog has encouraged you to practice itemized invoicing and told you all about it. If you want to learn more about invoicing templates and invoicing tips, visit our blog section regularly.