Regardless of your business size, billing can be one of the most challenging things that you have to deal with as a business owner. Despite sending your invoices on time, there’s still no certainty that you’ll receive payment on or by the agreed date. Creating a robust invoicing process can significantly enhance the chances of you being paid quickly and with as few queries as possible.
An invoice, or a sales invoice, is a document sent by the seller to the buyer to collect payment. However, an invoice isn’t simply a piece of paper that displays the total cost. A well-designed invoice should contain other important details, like the products being purchased or the services availed by the client. Additionally, it should contain information that is beneficial to both parties to track payments and maintain records.
Here are some tips for your business to adopt better invoicing practice, increasing the chances that you’ll receive payment in a timely manner:
1. Ensure clear payment terms
Your payment policy procedure should be explained clearly to your clients before any goods are exchanged or project started. This means that you should inform them when you’ll be sending an invoice––whether they should pay in full upfront, upon job completion, or if you want partial payment spread throughout the duration of a project. Doing so helps gain client trust as there will be no surprise when they receive a request for payment.
Moreover, you can also ask the client for their preferred time and method of payment. A clear and accurate quoting process will help with this as it will be specified before commencing with a transaction, how much it will cost. Thankfully, there are a lot of helpful resources and free materials that can help you with this. The Jobber Academy has a lot of practical advice to support you in how to write a professional service quote, amongst other useful small business advice and tips.
2. Automate your invoices
If you still create and send manual invoices, you need to address this quickly and start utilizing modern smart technology to avoid your brand being seen as in the dark ages. Take advantage of cloud billing applications and software that can automate the invoicing process, allowing you to conveniently send out quotes, estimates, and invoices.
Depending on what industry niche you operate in, you will want to find specific software that has been developed to support your specific operational activity. Take for instance a landscaping company looking to streamline their estimating to quotation system. Jobber would be a good fit in that it offers customizable templates to put together estimates which can then be translated into quotes. You can also create templates specific to certain clients as well as ones for non-recurring clients, containing all your branded and essential information.
3. Emphasize the customer’s information
Now that your invoices are automated through an invoicing system, the next step to undertake is to organize your invoices. To start, input your customer’s necessary information. This includes their name, billing and mailing address, email address, and, most importantly, their preferred payment method. By knowing these pieces of information, you can easily issue an invoice. This is particularly useful if a client hires you for a long-term project or your business is subscription-based.
Note that the faster you send an invoice, the more likely you’ll get paid on time. Also, you have some leeway in sending reminders to clients, which ensures that your accounts won’t suffer due to insufficient or lacking funds, helping you manage your finances.
4. Minimize or avoid common errors
Despite being an important part of every business, committing errors on billing can still happen. Unfortunately, continually making errors in your invoices will only cause confusion and mistrust, which may cause your company to appear unprofessional.
Here are some common mistakes you should avoid in your invoices:
- No due date
- Having surprising charges not agreed upon by the client
- Sending an invoice to the wrong client
- Services or products that aren’t clearly itemized
- Calculation errors
Errors usually happen if you manually generate and send out invoices. Fortunately, with invoicing software, you’ll be able to reduce the likelihood of this happening. The software will automatically track the billable time, compile quotes and costs, and then generate the invoice.
If applied, the top tips mentioned above won’t only make your business appear more professional, but it’ll also assure your clients that you are organized and pay attention to detail. Having better invoices will also lessen the chances of you receiving late payments, allowing you greater control over your cash flow. Thus, as a start, it’s advisable to invest in invoicing software as you’ll have uniformity of your invoices, lessen human errors, and be able to request and receive payments more easily and quickly.