The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.
One of the best parts of running your own business is getting paid. But creating an invoice, sending it to your client, and keeping track of it throughout the process can become complicated, especially when working with multiple customers on different billing cadences. From chasing down a late payment to realizing you invoiced the wrong client, you may feel like you can’t catch a break.
Fortunately, you don’t have to be an accounting expert to develop a convenient, headache-free invoice tracking system. Whether you choose to rely on a simple invoice tracking spreadsheet or prefer the advantages of automated accounting software with invoice tracking capabilities, there’s a digital solution for nearly every type of business.
The best way to keep track of payments comes down to the type of business you run. For instance, the way freelance writers invoice their clients (after the submission of an article) can be quite different from how interior designers bill theirs (such as 50% upfront with the remaining balance due 30 days after completion).
No matter how you choose to keep track of accounts payable, it boils down to creating a uniform, reliable process that works best for your business. And if you choose the right accounting software and integration, you can send and track e-invoices and payments with ease. Compared to an Excel sheet, accounting software takes the manual process out of invoice tracking. Check out the accounting software PayPal integrates with.
In the accounting world, money owed to your business from customers is known as accounts receivable. Here are tips for keeping track of outstanding invoices:
On the other hand, the money you owe to vendors and expenses is called accounts payable. Similar to tracking outstanding invoices, it’s just as critical to keep tabs on how much you owe.
An easy way to create your own invoicing tracking template is by using an Excel spreadsheet. With an Excel spreadsheet, you can organize your billing in multiple ways. While a ledger is usually kept chronologically according to date, an online tracker can filter your invoices based on name, receivable, date, receipt number, and more. When creating your Excel invoice tracking template, it’s a good idea to start by including the following:
In your Excel invoice tracking template, the invoice number is a crucial element. There are a variety of ways to assign invoice numbers, so choose the one that works best for your business. No matter how the number is formatted on the actual bill, consider using a standard number of digits. So, instead of entering numbers ‘99’ or ‘100,’ use ‘00099’ and ‘00100.’
If you organize your customers by name, enter that information here. Some vendors assign repeat clients a unique number. If this is true for your business, make sure you include that number with the client’s name.
While your bills may include dates for services, you generally won’t use a service date on your tracker template. For your Invoice Date, use the date that you issued the invoice.
This is the date the total amount is due.
Pro tip: In order to avoid confusion and potential late payments, it’s a good idea to list your payment terms directly on the invoice.
The amount is the grand total due, including any taxes or fees for things like delivery.
Even if your business doesn’t accept partial payments, it’s a good idea to keep track of the amount your client paid. You’ll be able to easily see when the transaction is complete and if you do end up processing a partial payment, you won’t need to make any changes to your template.
This number may be different from the total, particularly if you accept partial payments or if your business collects late fees.
This column is particularly helpful when you want to see a list of outstanding accounts. Typically, the status of a bill will either be Current or Past Due.
Pro tip: If you want to automate your invoice tracker, PayPal Invoicing can do the heavy lifting for you. The PayPal invoice tracker updates automatically to include each new bill and track its payment status. You’ll see the status of each invoice and have the ability to record payments, send reminders, and more, using a convenient drop-down menu.
Once you’ve got the basics covered, you can think about customizing your invoice tracker to meet your specific needs. Does it make sense for your billing to include additional information about the customer? Do you have employees who made the sale or provided the service? When tailoring your invoice tracker template, you may consider including the following details:
You probably won’t use this for tracking purposes, but having the customer’s phone number or email address on hand will save you the hassle of digging up their information if you need to follow up or send a reminder.
If your business deals with companies rather than individuals, you’ll likely have a point of contact within that company and may want to add that person’s name to your template.
For businesses that pay employees a commission, this column is probably a must-have. Even if your employees don’t earn a commission, it could be helpful to have an employee’s name attached to a sale, should you need any additional information.
On the rare occasion that you do need to send a reminder, this column is where you would record the date that you sent the reminder.
Depending on the payment terms for your business, late payments may incur an additional fee. Track those fees in this column.
No matter what your payment terms are, it’s a good idea to track how late an overdue payment is. If you work with a collection agency, this column is an absolute must-have, but even if you don’t, it’s an easy way to identify clients who are habitually late payers. If a client is consistently behind, it might be time to consider breaking ties.
With PayPal Invoicing, you'll have a dashboard where you can view the complete history of an invoice, accept payments from 200+ markets around the globe, and more. Even better, PayPal Invoicing can help you get paid fast by giving your customers an easy way to pay – even if they don’t have an account with PayPal.
No matter what kind of invoice tracker you use, organization is key. You’d hate to leave money on the table because of a messy ledger. PayPal Invoicing can help you stay organized, save time, and get paid fast.
With PayPal, creating an invoice can be more than two times faster – and includes real-time previews, guidance, and easy options to add common line items such as tax and shipping.1
Here’s a quick guide on how to use PayPal for Invoicing:
Your PayPal Invoice ID, also known as your PayPal invoice number, is a unique reference number for each transaction you make with PayPal. When you complete a transaction, PayPal sends a confirmation email that includes the Invoice ID.
Additionally, you can find the Invoice ID directly in your PayPal account by following these steps:
To check your PayPal invoices, simply:
From there, you can see all your existing invoices, along with their corresponding invoice numbers, statuses, amounts, and due dates. Use this information to follow-up on outstanding payments, track your accounts receivable, or create a new invoice.
Ready to get started with PayPal Invoicing? Learn more here.
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