Invoicing and Check Writing

What Every Small Business Should Know About Invoicing and Check Writing

Timely payments are important on either side of a business partnership. Learning how to manage invoices and understanding why it’s important to pay on time, are essential skills that, when mastered, can help you build trust with your vendors and business clients.

It is a good business practice to establish your payment preferences, terms and expectations at the beginning of any partnership or business relationship. Be sure to follow the same guidelines your business partners request of you, when you are invoiced for their services.

What Is an Invoice?

An invoice is the document that lists the goods that were sent, or the services that were provided, by one business to another. It also serves as a statement of the sum, or amount due, for the items or services delivered. Consider an invoice the same as a bill of sale.

Getting Paid by Invoice

First, let your customer know that you will be invoicing them for your products or services. Once you and your customer agree to invoicing and services have been rendered, create and send a professional invoice that states the amount owed to your business by your customer. It’s a good idea to remind your customer that you will be sending an invoice the first time you present one, so any questions can be addressed ahead of time, thereby minimizing delays.

When money is due to your company, an outstanding invoice is considered accounts receivable (AR). Like many other financial transactions associated with running a small business, an invoice is part of a paper trail that will be beneficial in many ways.

Include Your Payment Terms on the Invoice

Establish terms that fit your business needs. The industry standard for payment is NET 30, which means the invoice should be paid within 30 days of receiving the notice. Some businesses will choose payment terms of NET 7 or NET 15 to speed up the process. Keep in mind that requiring immediate payment or offering a credit period that is too short could influence your customer to switch to another supplier. However, choosing to extend payment terms for too long could impact your cash flow, which could make operating your business a little more difficult.

What to Include on an Invoice

Your invoice should also explain how you expect to be paid. Generally, payment terms are negotiated up front to help ensure that each party’s experience around billing and payment is as seamless as possible.

If you plan on writing your own invoices, consider using one of the many free templates available online. Most invoice templates provide prompts for the type of information that should be included. They can include:

  • Your company name and logo - If you have one, add your company’s logo. The logo can help make your invoice look more professional
  • Your contact information (at the company) – include your name, phone, email and if appropriate, your business address
  • Unique invoice number - typical invoices follow a numbering sequence to keep each transaction separated and defined. This helps to keep records organized which will also help with the paper trail
  • Date invoice issued
  • Customer information – who is the invoice being sent to? (company and contact name)
  • Customer order number or other reference number
  • Description of goods or services rendered, include tax if appropriate, or hours worked, etc.
  • Payment terms – due within NET 7, 15 or 30 days. Add any other details, such as acceptable payment types (check, electronic transfer, credit card, etc.)
    • If your business accepts checks, remember to include the mailing address and who to make the check payable to; either your name or the business name if you have a business bank account established for the business.

Paying by Invoice

In turn, your suppliers can invoice your business to pay for goods or services rendered. When you are invoiced, expect to see an itemized list, the dollar amount owed, the payment terms and the entity to which you will remit payment. Since you owe compensation to a supplier, the invoice is considered accounts payable (AP).

Developing a solid working relationship through timely payments can be a factor in establishing your business credit. Demonstrating a pattern of responsible financial behavior early on may positively also impact your ability to establish trade credit in the future. Establishing trade credit could influence your business credit scores and ratings, if a business partner or vendor is willing to serve as a Trade Reference.

Paying an Invoice with a Business Check

Paying for invoices using a check from your business bank account for business-related expenses can be a good idea, for many reasons. Your business checking transaction statements can help with your bookkeeping and financial records. These records are part of the paper trail, which will be used when filing your taxes. And in the long run, this practice may help to establish credit worthiness for your business.

Paying with a business check is very similar to paying with personal checks. Some of the small differences include your business name being printed on the check instead of your personal name. However, you’ll sign the check with your personal name, not the business name, as the check needs to be created by a person. Sometimes, businesses establish the requirement that two signatures are required. Two signatures can help to safeguard funds. If your business has instituted this practice, make sure the other responsible party representing your business (accountant, bookkeeper, or partner) has signed the check for it to be valid.

Make sure you know who to pay. If you are paying a supplier from an invoice, the payee is normally listed on the invoice with the terms of the agreement. However, if the payee information is not on the invoice, ask your supplier if they need the check paid to their company name. There may be a parent company that should be named instead.

As your business grows, you may want to consider automating the management of accounts payable and accounts receivable. Here are some resources that could help you learn more about solutions designed to help you automate invoice processing.

How to Automate Invoice Processing, Accounts Payable and Accounts Receivable

Accounts payable automation (AP automation) can help to replace manual processes and, reportedly, can help to reduce errors. Incorporating a digital workflow that can manage all the steps associated with payment processing can help to streamline what can be a very time-consuming process. Some systems are designed to create a check payment or to pay by wire/ACH. Some AP automation systems can auto-approve, code, and match items as well.

Credit-to-cash automated platforms such as Receivables Intelligence from D&B Finance Analytics can help streamline your company’s accounts receivable processes to improve efficiencies and cash flow. A credit-to-cash solution can coordinate credit management, e-invoicing, invoice disputes, collections, and cash application.

As with any software platform purchase, be sure to compare features, determine what is right for your small business, and ask for references whenever possible. Look for product reviews and speak to small business owners who operate a similar business as yours to see how a system works for them.


The content provided in articles are suggestions only and based on best practices. Dun & Bradstreet is not liable for the outcome or results of specific programs or tactics. Please contact an attorney or tax professional if you are in need of legal or tax advice. 

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