Ultimate Guide To Invoicing For SMBs

Not only does invoicing equip your SMB to make transactions at scale, but it also gives you more control over your cash flow and eventual financial success.


By Derry Cosgrave

One of the skills you’ll need to pick up as an SMB (small to medium business) owner is correctly invoicing clients and customers. Not only does invoicing equip your SMB to make transactions at scale, but it also gives you more control over your cash flow and eventual financial success.

Whether you’re new to the gig or a seasoned SMB owner, it’s crucial to nail your invoicing skills right from the get-go. Let's take a closer look at what that might mean for your SMB by exploring everything you need to know about invoicing, receiving payments, and avoiding common traps and pitfalls. And if you're looking for a new way to access funds tied up in your invoice process, Marmalade has a technology-based solution that might fit the bill — literally.

What is an invoice?

An invoice is a document that itemises a client’s purchases from your SMB and requests payment for said purchases. Invoices may be issued before, during, or after a sale and are used in virtually every industry.

The ultimate purpose of an invoice is to keep a record of purchases and payments, ensuring all bills are paid as expected. Every invoice must contain accurate and up-to-date information for you, your clients, and your SMB.

As you might imagine, invoices can quickly become complex and highly detailed. The information included typically depends on the client or SMB in question, although several fields stay the same between industries.

Standard invoices list several specific details that help clients pay their dues. These typically include:

  • The date of purchase
  • What was purchased
  • Quantity purchased or given
  • Price, discounts, and taxes
  • Issue date and due date

The best way to create an invoice for your SMB is to find, download, and edit a basic invoice template. Feel free to browse invoice examples from reliable companies, including cloud-accounting platforms like Xero.

Different types of invoices

Not all invoices are designed to accomplish the same purpose. Depending on your niche, products, or services, the documents you send to clients may look very different. In some cases, you may need to manage multiple invoice styles all at the same time.

Today, there are more than thirteen different kinds of invoices used by modern industries. Most SMBs just worry about five of them, although it's worth familiarising yourself with each.

Let's walk through each of the five below.

1. Standard invoice

This is the most common type of invoice used by SMBs. Each standard invoice contains the same fields: your name, the client's name, and any financial details, followed by a remittance date.

2. Credit invoice

These are usually sent out after a customer receives a refund or account credit. Think refund receipts at your local supermarket.

3. Mixed invoice

This style is typically used for two purposes: to invoice standard payments and to list any refunded credits. Consider this invoice to be a mix of standard and credit invoices.

4. Timesheet invoice

Timesheet invoices are standard in many service-based industries and list any hours worked, all services provided, and the agreed-upon hourly rate.

5. Pro forma invoice

Pro formas provide an estimated cost of work to be completed, which is confirmed in the final invoice issued later.

Sometimes, these basic invoice types are not enough to cover the full breadth of your organisational needs. You may want to work with an accounting professional to create a specialised workflow or use advanced invoice templates to combine multiple needs.

How to write an invoice

Writing up your first invoice as a new SMB owner may be stressful. Thankfully, learning how to invoice a customer is one of the easier things you'll do on your entrepreneurial journey.

It takes just a few steps to get started:

  • Know your products or services — This might sound obvious, but you must clearly understand what customers are buying before you start writing an invoice.
  • Gather customer information — You'll need your client’s name, address, email, and phone number.
  • Create a unique invoice number — This will help you keep track of invoices and make things easier on your accounting department (if you have one).
  • Include dates — The issue date should be placed prominently on the document, preferably in the header or footer. The due date should be listed near the top right corner.
  • Include a brief description — A few lines describing the invoiced products or services will help avoid confusion down the road.
  • Add prices and quantities — Be sure to list the prices and quantities of each invoiced item. If you offer discounts, be sure to include them here as well.

Additional fields, including late fees, terms and conditions, can be added near the bottom of the invoice.

And just like that, you're done. You're ready to send out your first invoice!

The ultimate purpose of an invoice is to keep a record of purchases and payments, ensuring all bills are paid as expected.

Problems you may encounter with a small business invoice

Invoicing isn't always sunshine and rainbows. There are often invoicing issues that arise between your SMB and its journey towards a positive cash flow.

There are three major pitfalls to keep in mind:

1. Typos and incorrect info

Invoices with even a single incorrect digit can lead to significant problems in the future. Almost 61% of late invoices are due to typos or human error.

2. Partial payments

When a customer only pays a portion of what they owe, it may squeeze your operational budget tight. Worse, it could make cash flow issues increasingly tricky to remedy. A concerningly high number of people are turning to partial or incomplete payments to make ends meet.

3. Non-payment

A whopping 60% of all invoices are paid late. This is the biggest and most frustrating issue to combat in SMB invoicing. Unpaid invoices prevent your SMB from reaching its full potential and may even require the help of a debt collection agency.

While you can’t always avoid some of these issues, there are some tasks you can accomplish today to take the pressure off tomorrow.

SMB invoicing strategies and case studies

Anticipating pitfalls in advance is key to avoiding critical business challenges. For several businesses around Australia, a simple revamp in their invoicing strategy was all it took to grow their business. If they can do it, you can too.

Here are some SMB invoicing strategies and insights you may want to consider for your company.

Don’t wait to cash in your funds

Trafficwerx NT had payment terms of 60 to 90 days, putting severe pressure on their bottom line. After partnering with Marmalade to instantly cash in their invoices, the company saves 30 hours monthly for just one team member. Today, Trafficwerx has nearly doubled in size.

Stop chasing unpaid invoices

Thor Building Products experienced significant invoice and cash flow issues during the COVID-19 pandemic. Working alongside Marmalade allowed the company to push through multiple income barriers and grow more than 17% in one year. Thanks to Marmalade, Thor Building Products’ human resources team saves more than 50 hours every week on invoicing tasks.

Get instant access to your invoices

Sometimes, all your SMB needs is a little pick-me-up while waiting on invoice remittance. To help with non-payment from customers, hundreds of Australian businesses have turned to Marmalade to cash-in their invoices in 24 hours or less.

Here's how it works:

  • Sign up for a free account with Marmalade
  • Issue invoices with Marmalade account details
  • Select invoices you're ready to cash in
  • Pay a one-time fee of between 3-5% per invoice
  • Get your money within one business day
  • Spend it that money however you please

Learn how Marmalade can assist your SMB by contacting us today.

Invoicing tips and tricks for SMBs

There's always room for operational efficiencies in an SMB, especially regarding invoicing. As you get more confident and proficient with your billing skills, try looking for ways to streamline the overall process. Clear branding is an excellent way to do this, followed by flexible payment options and a fallback plan for late payments.

Let’s look at each of these three tips in greater detail.

Have clear and consistent branding

Even in the world of invoicing, consistency is key. Identifiable branding adds professionalism, reliability, and timeliness to your invoices, encouraging clients to submit their payments in full.

A consistent look and feel to your invoices may also build rapport with clients, keeping your SMB at the forefront of their minds. Ensure that your logo is easily recognisable and include a text-based version to support accessibility. Keep all colours, text sizes, and fields in-line with your logo, and focus on visibility above all else.

Once you have a template set in stone, avoid altering it as much as possible. Change can be scary to some organisations and may even slow the approvals process and limit your positive cash flow.

Be flexible with payment options

These days, there's no one method of paying for goods and services — and your client base will likely reflect that. While some customers may prefer traditional bank transfers, others prefer paying via card.

If your SMB can offer multiple payment options, do so! Not only will this give your customers more choice, but it also demonstrates that you're willing to meet in the middle for your clients.

Marmalade makes it easy to accept invoice payments via any method — bank transfer, cards, or even direct debit. This way, you can focus on growing your business rather than piecemealing multiple payment solutions.

Have a fallback plan for late payments

In a perfect world, clients pay their invoices on time and in full. However, the unfortunate truth is that many clients fail to turn in payments exactly when expected. A surprising 54% of businesses already expect late payment for their invoices.

From a financial perspective, be sure to create an emergency fund that helps your SMB accommodate for late payments and missed income. This will help to avoid lingering cash flow issues and keep your daily operations running smoothly.

But emergency funds aren't always enough to cover significant payment gaps. As an SMB, you must ensure you'll get paid for your efforts while moving on to the next big thing. Partnering with an invoice payment platform may be an excellent answer to this — like the flexible solutions offered by Marmalade.

Create invoices and get paid with Marmalade

Invoicing is a critical part of running an SMB. Thankfully, it's one of the easiest to understand as well. Once you've created a basic template and filled it in with relevant information, you'll be well on your way to getting paid quickly, efficiently, and smoothly.

Of course, timely invoice payment is frequently the exception rather than the rule. While payment delays and pitfalls are always possible, navigating slowdowns and potential hiccups with a full suite of solutions is essential. From reminder notifications and emergency funds to early payments software, you need options you can trust — like Marmalade.

At Marmalade, we understand that SMB cash flow challenges often begin with slow-payment of invoices. That's why we've created an easy way to get paid without the stress, credit risk or unnecessary paperwork that you’ll find with other traditional solutions for poor cash flow. All you need to do is issue invoices, select which ones you want to get paid for, pay the one-time fee, and access your cash in 24 hours or less.

Give your SMB the flexibility to operate comfortably, calmly, and without invoice stress. Check out our FAQs or submit a contact form today to enquire about Marmalade’s solutions and how they might work for your brand.

Ready to get started? Create your online account today. Go ahead — it's free.