The 5Cs of Great Invoice Design
Switching from a legal to a marketing mindset
Most people wouldn’t rank invoices very highly when it comes to good design and good user experience. There is even a sort of expectation that it needs to be awful, so you can delay the moment cash leaves your wallet. Too often, invoices look like this:
What happened? The product and pricing options that companies offer have exploded. Invoices have evolved to reflect that complexity, adding more and more line items to the point that customers just don’t bother understanding them.
Of course, an invoice is a legal obligation and there are mandatory requirements for each country (if you don’t know them, maybe check the UK Government’s guidance). In some industry such as utilities, invoices are heavily regulated, sometimes to the detriment of clarity. The legal angle has obscured one of the main shifts coming with digital: invoices are becoming one of the main post-sales customer touch points. It’s a document that commands the customer’s attention (open rate on invoices emails are 70% vs. 5–20% for regular emails) and a good chance to broadcast the value you are providing. It may even incentivise the customer to review their usage and buy more of what they like — if you make it easy for them.
Follow these five guidelines to make great invoices that customers understand and can act upon.
Appearance counts when it comes to invoices. Invoices should look clean. Packed invoices look dreadful. They are hard to read. They are discouraging. Space the content. Summarise. Put the details at the end. Keep it light and simple.
Meanwhile, pay attention to details. Check the alignment of the content, the consistency and size of the font. Make sure the colours you use are in line with your brand. Use modern, clean design, not Windows 95 design. Apply a marketing eye to it — actually, get your marketing team to work on it.
If your marketing material, your order forms/quotes, and your invoices all look different and use different terminology, you’ll end up with customers who are clueless about the products they have purchased. If a customer can’t compare what they thought they bought and what they need to pay for, well guess what: they ain’t paying that invoice. Consistency is king here: you need to see the same language throughout the marketing, sales and billing process.
It’s not easy to align the language throughout your company. Take your biggest client. Does their invoice have the same product items as all the various orders forms they have signed over the years? If not, you’ll need to link this data, i.e. link your CRM and your accounting data, if you don’t want your finance team to be bogged down in endless reconciliation. And again, don’t forget the details: if your documents look wildly different in style, your client might not link the two documents.
An invoice is like a joke. If you need to explain it, it’s not very good. And in this case, a poorly understood invoice is likely to translate into no money in the bank. You’ll also get billing queries from your customers inundating your customer service and finance teams (and you can see in a previous post how this can get out of hand). So make sure that customers know what they are looking at:
- Is it a first bill, last bill, recurring bill, one-off bill, surcharge bill, pro-rata invoice or credit note?
- Is it an old bill or a new one? Which period is it for?
- Is the pricing clearly explained, especially for complex tiering or discount?
- What are the product categories?
- What is the VAT being applied?
Your billing experience should put the customer first and empower them to easily find key information and make necessary changes. For customer to pay promptly, the payment methods available need to be clearly outlined, the date due clearly spelled out and the right total amount indicated. But which total exactly? If you send multiple invoices across your products in a given period and your customer has outstanding amounts due, should you add them up and indicate the balance brought forward? Or should you let customer figure out their outstanding balance through a billing portal? Do you make it easy for them to retrieve all historical invoices? What if they want a statement? If your customers need to do work to figure how much is due, it’s likely they will leave it to the last minute. Or only pay half of what’s due.
Even if you incorporate all best practices, there will always be mistakes — actually 15% of invoices contain some kind of mistakes. You need to make it as easy as possible for customers to fix these mistakes. Have a billing portal that is easy to find and to use and where the customer can access all their invoices, credit notes and payments, see their product usage, check their contract and order forms, and submit a query. Put a number that’s localised for all the countries you operate in that direct customers to your Customer Care representatives trained on billing queries. Have an email inbox for billing queries that is monitored daily through a dedicated help desk tool like Zendesk.
Invoices should be concise, yet detailed. This may sound like an oxymoron, but an invoice can have all the relevant information while not feeling overwhelming. Detail should be introduced gradually, and at an appropriate stage in communication with your customer:
- When invoicing a customer, outline in the communications the amount and date due, the account and include a short summary of charges.
- In the invoice, start with similar summarised information as in your email. Add the details below the summary: itemised charges, your usage, how to get in touch, terminology…
- In the invoice, add marketing material, such as events, relevant products for this customer, vouchers for new offers — after all, you’ve got the data laid out there and it’s going to a finance person and senior directors.
That’s it. It’s not rocket science but with data scattered in various systems, it can be hard to achieve. Our 5C framework is a good place to start.
If you need help transforming your billing, get in touch with Operandi — we’re helping companies across the UK create the best experience for customers. And if you’re curious about billing and payments, follow me!