An invoice is a contract. It includes the terms and conditions of the sale, usually stating the date, price, quantity and description of what was sold as well as the terms of the payment, net thirty or whatever it may be.

In addition it may include any other information or terms you may desire. It is unilateral, and self serving as it does not require a signature or a response and is binding on both parties as long as the product described was ordered, delivered, accepted  and was in merchantable condition.

So what more could be wanted, or what is missing?

The consequence for failure to pay as agreed, a crucial part of the invoice, which many leave off, forget to include or never think about it in the first place. This is a crucial part of your collection process and a very expensive omission, yet  frequently not included.

Its the condition that says:

“Payment not received within thirty day of date billed will result in an additional charge of 1.5% per month and in addition the customer is responsible for costs of collection including reasonable attorneys fees incurred in the collection process.”

If this phrase, or something like it, is not included, and collection is required, then costs of collection including legal fees may NOT be collected and repayment for these additional expenses will not be enforced by a court of law.

Considering the high fees collection agencies charge and the expensive costs of the legal process, this is a very costly omission. In fact if you were forced to pay this out of pocket you would probably not be very likely to utilize collection agencies and lawyers to collect as the costs would be prohibitive in many instances as compared to what is being collected.

Even if the invoice is large enough to still warrant the collection process, why would you want to eliminate recovering the costs if by merely adding this line to your invoice allows you to include the costs plus interest in your collection.

Additionally, by adding this you can use this factor as an additional collection strategy explaining to your late paying customer that if payment is not received and you are forced to utilize the very expensive collection and legal process, the customer will incur the entire costs of the collection process in addition to interest and the actual invoice amount.

Many savvy business people will notice the absence of such language on the invoice and take advantage of the situation.

Another importanr concept may be your return requirements. Spell it out here and its binding on the purchaser.

Interest on late payment. State it ot lose it.

Warranty or guaranty rules could be printed on the back of the invoice, more room.

You can have it printed on the back or added to the front, but as long as it is on the invoice, your covered.

Do not send out another invoice without adding these most important terms of the deal.

There are many other terms you can add including a restocking and return fee if goods are either returned or sent back without permission. Shipping costs could be added, and anything else deemed part of the deal by the seller.

Don’t send out another invoice without reviewing what is on it and adding the appropriate language if necessary.

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