If you want to make sure that your business invoicing process is the best that it can be, then you have come to the right place. This guide will tell you about all the changes you can make, so you can improve your business potential while ensuring that people pay on time, every time.
Forgetting to Invoice
It’s very easy for things like invoicing to slip your mind because you’re so busy with other things. If you want to work around this then one of the best things you can do is try and adopt an automated process. It’s your responsibility to send out an invoice at the end of the day, so make it a priority that you can’t forget. If you do forget about it then at least make sure that you have an automated system in place, so you can remind yourself, or send one out automatically.
Procrastinating
Another major issue is procrastinating. The best time for you to send out an invoice is right after you have completed the project. Unless you have another financial arrangement with your clients, you can’t afford to wait. If you send an invoice late then this reduces your chances of being paid. If you send an invoice on the same day then you double the chances of being paid too, which is great, to say the least.
Not Following Unpaid Invoices
Even if you have made invoicing a priority and you know that you send them out regularly then there will still be times when your client doesn’t pay, or when they miss a due date because they misplaced it. Like sending invoices in the first place, it’s your responsibility to follow up on an unpaid invoice. You also need to make sure that you are taking the time to send out automated reminders if possible. Invoicing software is the best way for you to do this, so be sure to keep that in mind. If you find that the client is unresponsive then you may even find that you have to take them to a small claims court.
Having Unclear Terms
Avoid using any kind of vague language when writing an invoice. If you want a client to pay your invoice quickly then make sure that you include this on your invoice. Make sure that you state prices and quantities too. If you can, it’s wise for you to avoid ambiguous language and make sure that you include as much detail as possible. If you can, you also need to make sure your clients understand when the payment is due by using dates, rather than net. It’s helpful for you to state the consequences of not paying an invoice too if you can, as again, this can help you to make sure you are going to get paid on time.
Sending the Invoice to the Wrong Department
Just because you agreed on a project scale, and even the payment terms with someone, that doesn’t mean that they are going to be the ones responsible for paying the invoice. After all, it may be that they have a different department or that they have an outside entity handle their billing for them. If you want to help yourself here then it’s a good idea for you to look into things like 3-way matching in accounts payable so you can make sure that everyone is on the same page. You might also want to make sure that you are setting clear terms and that you have a solid idea of the process your clients are working with.
Not Dealing in Contracts
In an ideal world, all you’d need to do is handshake with someone to get the deal done. This isn’t true in this day and age, though. As time goes on, it’s not uncommon for business terms to change because of consumer tastes or even the economy. It’s in your best interest to try and have a contract signed, as this is a good way for you to stop yourself from being played, and to make sure that you are always getting paid on time. Having your clients sign a clear and simple contract helps you to ensure that you are protected, and it also makes sure that you are on the same page when it comes to your payouts. There is nothing wrong with you having a handshake deal, but at the same time, you do need to make sure that you are signing contracts as well, to make sure that everyone understands what is expected of them.
