Why do small farms need invoices?
An invoice is a record of what was sold, to whom, when and for how much. It helps the buyer pay, helps you track who owes you money and gives you proof for taxes and loans.
Cornell Small Farms Program material on bookkeeping and wholesale customers points out that a good record system also improves communication with buyers, since both sides can see the same facts.
What should an invoice include?
Keep it simple. Put your farm name and contact details at the top, the buyer's name, an invoice number, the date, a line for each item with quantity and price, a total and the payment terms.
Number your invoices in order so none go missing. Save a copy of each one in a folder or system where you can find it by customer and date.
- Farm name, address and contact details
- Buyer name and invoice number
- Date and delivery date
- Items, quantities and prices
- Total due and payment due date
- How the buyer can pay
How do I choose a payment system, and what should a very small farm start with?
Start with what your buyers prefer and what you can manage. Options include cash, checks, bank transfers and online payment services. Each has costs, such as fees, wait time or the effort of depositing checks.
Michigan State University Extension and Penn State Extension both publish guides to accounting software for farms. Read about features, learn what you need, and test a free trial before you commit. Keep the system as simple as you can.
You do not need accounting software on day one. A numbered invoice book and a simple spreadsheet with columns for date, buyer, amount, paid and date paid will carry many small farms for a long time. When the number of buyers grows, or when you feel the hours piling up, look at software options. Ask your extension office or a tax professional which features matter for a farm your size.
- Check any fees the service charges and who pays them
- Ask how quickly funds reach your bank
- Make sure you can export your records
- Choose something you will actually use every week
How do I set payment terms?
Decide how long buyers have to pay and write it on every invoice. Many farms ask for payment at delivery or within a short, stated period. For new buyers, consider starting with payment on delivery until trust is built.
Say in advance what happens if a payment is late, such as a reminder, a pause on new orders or a late fee where allowed. Check whether late fees are permitted where you live before adding one.
Late payers are rarely the buyers you worry about. Often it is a busy manager or a missing purchase order. A clear invoice with a named contact makes it easier for the buyer's staff to process payment.
How do I follow up on unpaid invoices?
Check your list of unpaid invoices on a set day each week. Send a friendly reminder as soon as one is late, not weeks later. Most late payments are oversights, and a polite message usually solves them.
If an invoice stays unpaid, call, then write a clear second notice. Keep notes of each contact. If a large amount is at risk, ask an attorney about your options.
- Review unpaid invoices weekly
- Send a polite reminder right away
- Keep a short log of each contact
- Pause new deliveries if a balance grows
How do invoices fit with records and taxes?
Match invoices to deposits so you can see that every sale is recorded. Keep sales and expense records together, and store them as long as your tax professional advises. Rules on how long to keep records vary, so ask.
Do not mix farm and personal money if you can help it. A separate account for the farm makes everything easier to track and explain.
What are common invoicing mistakes?
The first is waiting. Invoices written weeks after delivery are harder to match and harder to collect. Send the invoice with the delivery or the same day whenever you can.
The second is unclear terms. If an invoice does not say when payment is due or how to pay, buyers fill in the blanks themselves. Put the terms at the bottom of every page in plain words.
The third is scattered records. Invoices in a glove box, texts in a phone and receipts in a drawer make it nearly impossible to know who owes what. Pick one place, paper or digital, and use it every time.
- Invoice at delivery or the same day
- State due date and payment method on every invoice
- Keep every invoice in one place
- Record each payment when it arrives
Key takeaways
- Send a numbered invoice for every credit sale with clear payment terms.
- Choose a payment and record system you will really use each week.
- Follow up on late payments quickly and politely.
- Match invoices to deposits and keep farm money separate.
Sources and further reading
Last reviewed: November 12, 2026. Written by the Homestead & Small Farm Editorial Team. See our editorial policy.