Best Practices in Billing #6
The invoice form itself should be professional in appearance and easy to navigate. It should be called an Invoice for Services Rendered or Statement for Services. It must be clear that it is a bill with an amount to be paid. The firm’s Employer Identification Number should be stated on the Invoice. Your client’s name and address as well as yours should be displayed. The Invoice should contain the date it is sent to the client. Time worked, expenses incurred and subtotal amounts should be set out clearly with the total amount owed at the bottom so that the client knows how much to pay.
Terms should be reflected on the invoice so that the client knows when payment is due, how to make payment and whether there is a discount for early payment or a penalty for late payment. If you can receive payment electronically, describe how that feature works and how the client may make use of it.
Traditionally the bottom or end of your invoice should be a clear statement of how much is to be paid and any applicable terms[1]:
|
Payment Time: |
15 days |
30 days |
60 day |
75 days |
|
Adjustment: |
-5% |
0 |
+5% |
+10% |
|
Adjusted Amount Due |
$950.00 |
$1,000.00 |
$1,050.00 |
$1,100.00 |
Send the invoice by email or snail mail based upon your office’s best practice and your client’s need. Hard copy, snail-mailed invoices are often perceived as more professional. Emailed invoices, making use of PDF format, work best for clients set up to receive the invoice in this manner.
A personal note from you with the invoice can often help the communication process. It can be a Thank you, or I’ve enjoyed helping you, or I would appreciate prompt payment, should that be appropriate. It lets the client know that you have had direct input into the invoice. If you need to call about a past due sum, the note might say I’ll be calling you soon to discuss this.
To regulate cash flow, time entry must occur as near as possible to the action performed and billing must occur on a regular schedule. When billing at the end of a flat fee event that is completed, the invoice should issue immediately upon completion of the project. When accounting for time on a regular, monthly basis, invoices must go out as close as possible at the same time every month. For clients who are billed quarterly or on another time basis, the invoice must go out immediately at the end of the cycle. The cycle must be consistent with the fee agreement and your oral discussion with the client of the billing process.
If you bill at the same time that you deliver work product, send these items separately. The invoice gets its own envelope or email.
Next: Tips for Better Invoicing.
The PMAS is a multifaceted Bar program designed to help Bar members improve and enhance management skills in the practice of law. Daniel Mills, assistant director for PMAS, Regulation Counsel, and Rochelle Washington, senior staff attorney, PMAS, can be reached at 202-737-4700, ext. 3212 and 3217, respectively, or at [email protected].
