13+ Invoice Mistakes That Delay Payments & How to Fix Them

Invoice mistakes are among the most common reasons businesses receive delayed payments and experience poor cash flow. These mistakes can be anything from missing an invoice due date to adding an incorrect total, performing wrong tax calculations, or not listing clear payment terms.

In this article, we’ll go through the biggest and most common mistakes you can make with invoices. We’ll discuss how much making these mistakes can cost your business, and then provide tips on how to avoid or fix them.

15 Common Invoice Mistakes That Can Hurt Your Business

Here are the most common invoice mistakes that often lead to payment delays, client confusion, and cash flow problems:

#1. Missing Invoice Number

Missing an invoice number makes it difficult (if not impossible) for accounting departments of both the payer and the payee to track the payment.

An invoice number is a unique code that is assigned to each document, typically in a sequential order. It represents an identifier that clients can use to process payments and contractors to monitor their finances and unpaid invoices.

The simplest way to fix this mistake is to immediately void an invoice once you notice that you’ve sent it without a number. Following that, you simply generate a new copy that includes this detail and send it to the client, apologizing and communicating the reason behind your actions.

To prevent these invoicing errors from happening in the first place, it’s recommended to use an invoice generator or accounting software instead of, for instance, Word invoice templates.

#2. Incorrect Client Information

Having incorrect client information on an invoice is a surefire way to have it rejected.

A simple misspelling of a company name, the wrong billing address, or an incorrect Employer Identification Number (EIN) can create legal obstacles, since corporate accounting departments have to adhere to strict compliance rules when issuing payments. Simply put, if the details on an invoice don’t match the information about the company as a legal entity, they usually can’t issue a payment.

If you’ve issued an invoice with the wrong client information, you should contact the recipient to clarify which details need to be corrected. With the right details, you can reissue an invoice and ask them to discard the previous one.

To avoid this mistake, always request Form W-9 from your clients or implement a standardized onboarding procedure during which you’ll gather all the necessary information.

#3. Forgetting Payment Terms

Since invoice payment terms define when you expect to be compensated for goods sold or services rendered, omitting them can cause confusion. An invoice without these essentially tells clients that it’s up to them to pay when they want to.

For example, a client may assume one of the longer net terms (e.g., net 60 or net 90) when, in reality, you could be expecting payment within 30 days. This can disrupt your timeline and create problems with your cash flow, even if the client pays in the end.

In case you send a document without payment terms, you can follow up with a quick and polite email about the invoice mistake that clarifies the intended due date. By adding these details in your initial contract or using a professional generator, you can prevent this mistake from happening in the first place.

#4. Miscalculating Totals or Taxes

Miscalculated totals or taxes typically happen when business owners manually calculate and input the items on their invoices. The risk for this invoice mistake increases with more items on the form, with added discounts, state sales tax calculations, and so on.

Overcharging a client makes you appear unprofessional and can damage your relationship with them, while undercharging results in lower profit. Plus, discrepancies can make tax filing difficult and result in further problems during audits.

It’s good practice to issue a credit memo (credit invoice) to void the document, and then generate a brand-new, accurate one. Also, you should never manually calculate totals and taxes; using dedicated accounting or invoice software prevents these mistakes from happening.

#5. Charging Incorrect Rates

Charging incorrect rates usually happens when you raise your prices but forget to update your pricing sheet, or when you mix up different types and tiers of clients. This mistake may result in delays and awkward communications with clients, as you have to explain and justify your pricing. Depending on the situation, it may also lead to an invoice dispute.

If you notice that you’ve overcharged your client, notify them immediately with an apology and a corrected invoice. However, if you’ve undercharged them, sometimes it may pay off in the long run to honor the initial deal and maintain their trust.

You can prevent this invoice mistake by maintaining a centralized digital pricing sheet or saving unique rates directly to client profiles in invoicing software.

#6. Sending Invoices Late

Sending invoices late tells clients that you aren’t in a rush to get paid, so they may further extend the process. This mistake isn’t only damaging to your finances, but to the client’s, as well.

Many of them stick to specific budget cycles; when they receive your invoice late, they can push it into the next payment cycle. Moreover, as time passes, they might forget some of the details regarding the project, which will result in additional communication and more delays.

If you send an invoice late, add a polite note in which you apologize for the delay. Also, don’t include an aggressive net term or an invoice late fee to improve your cash flow at the client’s expense. To avoid the mistake from happening, use software automation, scheduling, and software reminders.

#7. Sending Invoices That Don’t Look Professional

An invoice that doesn’t look professional (e.g., plain text document, no branding, poor formatting) negatively reflects on your business. The clients may find it difficult to read and process it or even question your legitimacy.

While even a simple handwritten invoice can work in a pinch, you should aim to create and use a standardized template or specialized software. You can’t unsend a bad-looking invoice, but you can upgrade your system and ensure the following documents are high-quality.

#8. Not Keeping Proper Records

Not keeping records associated with your invoices and payments poses a significant compliance risk. The process of billing clients doesn’t end after you’ve sent an invoice and received payment. Instead, the IRS requires businesses to keep tax-related documentation for at least three years, and up to seven years.

Beyond that, records like invoices, receipts, Forms 1099, etc., are required when balancing your books and keeping track of your accounts receivable.

If your invoices are scattered across various digital channels (e.g., emails, messaging platforms, invoicing software) and storage, you should download and organize all of them into a secure offline or cloud location. Following that, you can transition to an automated solution that saves and categorizes every invoice and associated document for you.

#9. Ignoring International Payment Details

Adding international payment details to your invoice is essential when doing business in the global market. Without it, international clients won’t have the information required to pay you.

Common details that businesses forget to include are:

• SWIFT/BIC codes
• IBANs
• Currency specifications

If you’re frequently conducting business internationally, you should include these details in your invoice template or software. Also, always specify the currency to avoid issues with conversion rates.

#10. Missing Purchase Order (PO) Numbers

Many companies require invoices to have purchase order (PO) numbers before approving them and processing payments. If a PO number is missing from your invoice, the form may get automatically rejected by the client’s accounting department.

When in doubt, you should always ask the client if they require a PO number beforehand. If you’ve already sent an invoice without one, you can communicate the mistake to them before issuing a corrected version.

To prevent this mistake from happening in the first place, it’s good practice to always reference the PO number (when there is one) in a prominent place on the invoice.

#11. Not Itemizing Products or Services

Not properly itemizing products or services and lumping them all together can be confusing or frustrating for the client. Vague descriptions, like “Consulting Services” or “Production Materials,” provide little information and leave the clients wondering what they are paying for.

This can result in back-and-forth communication as clients try to ensure they aren’t being overcharged. To avoid this, you should reissue a corrected invoice with every item listed separately, with its own descriptions and rates.

It’s good practice to be concise but provide relevant information with every invoice. For instance, you can include an item like:

• Marketing consulting: 20 hours, $150/hour - $3,000 total.

#12. Sending Invoices to Wrong Contacts

Sending invoices to the wrong contacts can result in significant delays, and this is a particularly big mistake when working with large companies that have dedicated accounting departments. If you send an invoice to another contact (e.g., a project manager with whom you have a great relationship), the payment might get delayed for weeks or even months.

If you’ve already sent your invoice to the wrong person or department, you should reach out with a polite follow-up message and ask them to forward the document to the billing department. To prevent this from happening, always ask the client during the onboarding process to whom to send the invoice.

#13. Offering Only One Payment Method

Offering only one payment method can be too restrictive and a big friction point for the client. For instance, some clients may prefer paying with a credit card, while others will opt for digital ACH transfers. If you don’t give them the options they want, they may prioritize businesses that do.

If a client notifies you that they are having difficulties via the method you included in your resume, you should offer them a temporary alternative (e.g., a PayPal invoice). Following that, it’s always beneficial to diversify your payment options.

#14. Not Following Up on Unpaid Invoices

Many businesses assume their invoices will be paid automatically, so they don’t follow up. In reality, clients can miss, forget, or overlook an invoice, in which case a simple reminder can expedite the payment.

You can send reminders both before and after the due date. Here’s an example of a reminder timeline:

• 3 days before the due date
• At the due date
• 7 days overdue reminder

Setting automated reminders can significantly reduce instances of unpaid or overdue invoices.

#15. Using Inconsistent Invoices

Using inconsistent invoice styles and formats can confuse clients. Common inconsistency errors on invoices include:

• Different invoice numbering systems
• Changing layouts
• Missing information

To prevent these invoice mistakes from happening, you should create a standardized invoice template or use specialized software that creates uniform documents with consistent numbering and formatting.

Why Invoice Mistakes Cost You More Than You Think

Invoice mistakes cost more than you think because they can disrupt a business’s entire operations and financial stability.

Even small errors (like simple typos) can cause clients to stop processing payments until they are resolved. The accounting department may need to reject an invoice, request a new one, and wait until it’s delivered to begin the process again.

This can have significant negative effects on cash flow, which is especially prominent in freelancers and independent contractors, as well as small businesses. With less cash to work with, these professionals may struggle to cover their costs, like payroll or inventory.

Such mistakes can also damage client trust. Constant invoicing problems will make your business appear disorganized and unprofessional. This can make it harder to create long-term relationships with clients, and they may scrutinize and process your invoices even more slowly.

Finally, making mistakes with invoices can lead to problems with income reporting and taxes. Since the IRS has strict recordkeeping requirements for audit documentation, not meeting them can make it difficult to prove your income, justify expenses, resolve tax disputes, and more.

How to Prevent Invoice Mistakes in 5 Steps

To prevent invoice mistakes, you need a disciplined and systematic approach to billing your clients. Here are the key steps to help you achieve that:

• Use invoicing software. The most common billing mistakes associated with manual input and calculations can be resolved by automating the process with specialized software.

• Implement a standardized client onboarding protocol. This helps you collect all the information and documents from the client (e.g., Form W-9) before you begin the work.

• Automate various invoicing processes. You can automate many frequent activities, like sending recurring invoices or follow-up messages. This not only minimizes the chance of making a mistake but also saves you a lot of time in the process.

• Create a double-check policy. If you have multiple employees or departments, you can create a system where one person creates an invoice, and another one verifies it before sending it to the client. If you’re a solopreneur, you can step away from the invoice and check it again after an hour or two.

• Regularly audit your records. You should conduct regular internal audits (e.g., once a quarter) to reconcile all the invoices you issued with the corresponding bank statements. This ensures your records are clean and helps you uncover any unpaid invoices that you may have missed.

Prevent Invoice Mistakes with Paystub.org

If you want a simple and professional solution that will help you avoid making invoice mistakes, you can use invoice generator from Paystub.org.

Our software is easy to use and requires no training or previous experience. It comes with multiple ready-made templates that you can customize further with your logo and messaging.

Plus, it has many handy features that make client invoicing a breeze, including a built-in calculator for rates and taxes, an automated numbering tool, preset payment terms and discount types, and more.

Final Thoughts

Invoice mistakes can cost you time, money, reputation, and client relationships, but fortunately, most of them can be corrected quickly and prevent the issue from escalating. Even better, you can avoid making the mistake in the first place by paying attention and implementing steps to ensure accuracy.

Therefore, it’s important to onboard clients, standardize invoice templates, and automate as many processes as you can. Apart from that, you can use our invoice generator and let the tool do the heavy lifting for you!

Invoice Mistakes FAQs

#1. What happens if I send an incorrect invoice?

If you send an incorrect invoice, the client will likely reject it. This will immediately cause a payment delay, as you will have to communicate with them to clarify the mistake. Following that, you should issue a revised invoice as soon as possible to prevent further delays.

#2. Can I edit an invoice after sending it?

You should not simply edit an invoice after sending it to the client and end up with mismatched copies of the same record. Instead, it’s good practice to void the invoice that needs to be corrected or issue a credit memo, and then generate a brand new invoice.

#3. Are invoice mistakes illegal?

Invoice mistakes aren’t illegal if they are made by accident and corrected as soon as they are discovered. However, intentional manipulations in attempts to overcharge clients or conceal amounts for tax purposes constitute invoice fraud or tax evasion and are punishable offenses.

#4. How long should I keep invoices for tax purposes?

You should keep invoices for tax purposes for at least three years. The IRS sets rules when it comes to keeping tax-related documents, and the exact periods vary. For instance, if a document is used to claim bad debt deduction, you should keep it for up to seven years.