Partial payments

A quick note regarding partial payments. There may be times when, for example, a customer owes you a total of $937.54 but will send you a check for $415.12. How do you apply this payment? If the customer has a good bookkeeping system, there will be invoice numbers written on the check so that you know to which invoices this payment relates. If not, you may need to do a quick scan of all the invoices outstanding for that customer. Starting with the oldest invoices, add up a few and see if you can recreate the amount of the check. If not, you will have to call the customer to find out which invoices he or she is trying to pay. This situation could mean that your customer's records differ from your own, and it might be a good opportunity to correct the problem.

However, if the customer owes you $937.54 and sends you a check for $500, you can assume that the customer is able to make only partial payment of his or her account. Apply the payment to the oldest invoices first.

Preparing Invoices

A quick word about the preparation of invoices. You should prepare the invoices as soon as possible after you have provided the service or product to the customer. One copy should be forwarded or presented to the customer, and one should be kept for your records. Your invoice will be more effective if you include as much detail as possible about the service or product provided, including dates of service (if applicable) or number of items. The invoice should also show any retail taxes separately.