How to Send an Electronic Invoice
An invoice, is a document issued by a seller to a buyer, relating to a sale transaction and indicating the product(s), quantities, payment terms, and agreed pricing the seller had provided the buyer. Here are the step by step instructions on how to send an invoice:
- Create an invoice layout using a Word Doc, PDF, Template, Invoicing Software, or Merchant Service Provider that includes invoicing
- Fill out billing detail(s) and line item detail(s) including item descriptions, quantities, prices, etc.
- Ensure the fields and formatting are accurate and legible
- Include terms and conditions (these should include payment terms, refund policy, delivery terms, etc.)
- Send the invoice to your client via email, post mail, or deliver in person
- Provide a way to collect payment either by Credit/Debit Card, ACH/eCheck, or cash.
- Collect your funds!
Alternatively, there are a number of software systems that provide invoicing features. For example, it is common to find invoicing functionality within your CRM, Accounting Software, or Payment Processor. Payline has a robust Invoicing Platform – click, here to schedule a call to learn more.
Here are a few tips on how to find the best invoicing software:
- Understand your needs
- Will the software be specific to your industry?
- What do other companies use?
- What are its features, advantages, and benefits?
- Does it have integration capabilities?
- Understand your cost
- Ask the right questions that pertain to your particular use cases
- Get a demo on how to send an invoice in the system
How to Collect Payment for your Invoice
One very important aspect of invoicing is collecting payment. To add convenience to your client, you will want to provide a way for the client to pay you within the invoice. This way, you can get paid quicker, and the client can get the product or service faster. Most platforms will have a payment link within the invoice to render payment, where other’s might ask you to call or log into any online portal in order to pay the invoice.
The quickest way to accept payment is through credit card. Once you get set up with a merchant account, you can have your client pay you with a credit/debit card, and have funds settle into your bank account the next day. A merchant account is a type of bank account that allows businesses to accept payments in multiple ways, typically debit or credit cards. A merchant account is established under an agreement between an acceptor and a merchant acquiring bank for the settlement of payment card transactions Alternatively, a more cost effective way to accept payments is by using an ACH/eCheck. Let’s discuss this more below.
What is an eCheck?
Also known as an electronic check, an eCheck is essentially a digital version of the traditional paper check. An eCheck revolves around withdrawing money from the payer’s checking account via the Automated Clearing House (ACH) and deposited into the payee’s checking account. This payment is generally enabled by the ACH network, which is basically an electronic payment network used by financial institutions in the US.
So with an ACH merchant account, you can send an invoice to a customer and receive an eCheck payment for the billed items directly from the customer’s bank account. Keep in mind that the payment will have to be authorized by the customer through a signed contract, a recorded voice conversation, or by acceptance of a website’s “Terms and Conditions”.
Benefits of using eCheck Payments
Here are some of the benefits of using eCheck payments.
Low-cost and Secure
One of the main benefits of using eCheck payments is that they’re low-cost and secure ways to process payment online. You don’t have to account for the percentages that go back to the card brands for using their networks when compared to using credit cards. In most cases, sending and receiving eCheck payments cost a flat rate fee, which is typically about $0.25 irrespective of the size of the invoice being paid. The fact that eCheck payments are bank to bank transfers means that your money is safe because the payment is deposited straight into your bank account.
Again, using an eCheck payment is a great way of reducing the costs of paper checks. There are no costs of postage or any such related costs. They’re also very secure as all financial and personal data are encrypted and protected. These eCheck transactions also adhere to all payment standards established by financial institutions across the nation.
Fast and Efficient
With an eCheck payment, money is withdrawn from your customer’s checking bank account and electronically transferred to your bank account. Unlike the traditional check that must be sent through mail or delivered in person, an eCheck payment typically takes less than a week to be cleared from the payer’s bank account and for the funds to appear in the payee’s bank account.
In terms of efficiency, eCheck payments are an excellent way of making recurring payments such as health club memberships, mortgage/rent payments, auto loan payments, etc. It is common in certain industries that an up charge (also known as a surcharge) will occur when credit cards are taken for one time or subscription payment. In comparison, businesses will not up charge for ACH/eChecks due to the cost being so low.
How to Send an Invoice for an eCheck Payment
- Ensure you have a solution in place that allows you to accept your client’s bank account and routing number
- You will need to create and send an invoice as described above.
- Have your client approve the invoice and authorize the transaction by providing their banking information
- Ensure that the information is properly entered into the ACH payment software to start the ACH transaction process.
- If the details are correct, your customer’s bank will receive the transaction and authorize it. The payment will be withdrawn from the customer’s bank and deposited into your bank account.
As discussed, an eCheck payment is an excellent, simple, and secure way for businesses and individuals to electronically make payments from their checking accounts as fast as you can send an email. To this end, it’s important to note that eCheck payments are here to stay. They will most definitely evolve and businesses and individuals will increasingly continue making payments through eChecks. As such, it’s of great importance to understand how this process works both as a payer and a payee.
As a platform, we offer an invoicing option where you can create a new invoice, add the billing line items, send reminders, and collect payment either through credit card or ACH/eCheck. Whether this process take place from your computer, tablet, or smartphone, you can easily collect payment using your client’s account and routing number to keep cost low. Reach out to one of our payment experts today to see how you can send an invoice and collect payment today.