Design the template
Open the sales settings and choose Customize look and feel. Add your logo, company details and a clear title. Include your payment terms, your preferred payment methods, and a note that explains late fees if you charge them. Keep the layout simple so the amount due and the due date are obvious.
Products and services list
Set up items with descriptions and linked income accounts. A short list of services with plain descriptions gives you consistent income reporting. Mark whether an item is taxable and connect it to the correct tax settings. Too many near-duplicate items cause confusion, so merge them.
Terms, reminders and late fees
Choose default terms such as due on receipt or Net 15. Create reminders that go out before the due date and after it. Tone matters, so write the text as you would to a client you wish to keep. If you add late fees, apply them consistently and record them as income, and check your state rules and contract before charging.
Accept payments online
If you enable online payments, customers can pay from the invoice by card or bank transfer, depending on what is available to you. Review the fees and the time it takes to receive funds. Payments appear in Undeposited Funds or in your bank, depending on settings, so decide how you want to reconcile them. Test with a small invoice to yourself.
Check the flow end to end
Create a test invoice, send it to a personal email, pay it, and watch what happens. Does the invoice mark as paid? Does the deposit match the bank? Is the fee recorded? Fix any step that looks wrong before your customers see it. Use statements for customers with several open invoices, and review the aging report weekly.
Finally, store your terms in your customer agreements so the invoice is not the only place a late fee or payment rule appears. Clear terms avoid disputes, and they give you a stronger position if you ever need to pursue collection through an attorney or small claims process.
Collections routine
Run the aging report every Monday. Contact customers with invoices a few days overdue by email, and call anyone over thirty days. Offer a payment plan in writing if needed. Record every contact in the customer notes so that anyone in the business can see the history. A steady routine keeps small overdue balances from turning into write-offs.
Decide how you will show sales tax, discounts and deposits before you start. Taxable and non-taxable items should sit on separate lines. Discounts can be a line item or a percentage, but use the same method each time. If you collect a deposit, apply it to the final invoice so that the customer sees what remains. Consistency makes the reports cleaner and helps customers understand the bill.
Worked example with numbers
Create a $500 test invoice to yourself with online payments turned on, pay it with a card, and follow it through. The invoice should become paid, the processor deposit should arrive net of fees, and the bank feed should match the deposit. If fees were $14.80, the deposit is $485.20, and the fee should be recorded as an expense.
Mistakes that cost money
Not testing. Skipping terms and late fee wording. Letting payments sit in Undeposited Funds. Forgetting to record fees.
Check your work
After the test, deposit and fee should match the bank.
Common questions
Can I charge customers the card fee?
Rules on surcharges vary by state and card network. Check before adding a fee.
Should I send invoices automatically?
For fixed retainers, yes. For variable work, review before sending.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.