January 16, 2017
There are so many different aspects to creating and running a successful business. Besides trying to find new customers and creating the best product or service, you still need to take care of your finances.
One of the most important yet time-consuming features can be the invoicing process. However, it doesn’t have to be a chore at all. And, if you do it right, it can be a very easy, efficient task.
Let’s look at 7 of the best ways to make your invoicing less painful.
One of the best ways to ensure that your invoices will become less painful is just to automate it. As most people do nowadays, they have an invoice template and then they manually enter the information every time. This is perhaps the main reason that invoicing for them is so painful.
While this is one way to go about sending invoices, it is not the most efficient. A better way would be to use online invoicing software. All the information is stored on the cloud, meaning you won’t have to look for details anymore. Even better, you can invoice from anywhere at anytime.
Be consistent in how and when you send out your invoices. You need to have an organized system, which invoicing software can help with.
Beyond that, it’s also very important to be organized in how you store your customer’s information and to be on top of the time spent on each project. Doing this, you’ll be able to much more easily and accurately bill your clients for the costs of your services.
One of the most important ways to make invoicing less painful is to start sending out your invoices faster. It’s really a no-brainer: the faster the invoices go out, the faster the payments can come in.
If you don’t, your invoices may be delayed in the company’s accounting processes. There’s a certain window in which companies will pay for their invoices, and it’s best to do it on time. Set aside time at the very end or beginning of the month to prepare and send out your invoices.
When you send out your invoices, you should be very clear in what it is you are billing the customer for. Be sure to include only the most important details on the invoice in simple language.
If you are invoicing your client for a WordPress site, you should write “WordPress site” on the invoice without any unnecessary additions.
One of the most important things you can do even before you send out your first invoice is to create clear terms and conditions. These are great for helping to set the expectations of your client for your services.
Your terms and conditions should include:
• whether you’ll take payment beforehand
• how much time will be allotted for payment
• whether there’ll be any late fees
• what types of payments you’ll accept
• whether you’ll deliver before or after payment
When you settle these questions beforehand and make them clear to your client, you’ll be able to avoid any challenges or surprises later on.
To make your invoicing less painful, you should set late payment fees for your customers.
What this means is that if your client is late for one reason or another, not only will they have to pay the original fee, but also an additional late fee. This is mainly for the purpose of providing an incentive for them to be prompt in their payment.
One mistake that many people make, however, is by setting the payment due date for 30 days. This is quite standard, although not very efficient. In order to be paid faster, you should set your due date for 14 days upon receipt of invoice. That way, you’ll be able to get paid faster organically, or to have the late payment fee kick in to incentivize your client to pay.
This one is crucial. In order to avoid being paid 72 days late on average, you need to follow up on your late payers.
Many small business owners and freelancers avoid this step, but it is one of the best ways to make invoicing less painful.
It doesn’t have to be particularly unpleasant at all. If you use online invoicing software, you can simply send a payment reminder through the software. Alternatively, you can write a polite, short and direct email to remind your client that payment is already due.
It is important to remain polite and positive, as this will help you to get paid faster. If your client still does not pay, you can send another email. Even better, you should take the extra step to call your client and inquire about the payment and if there were any problems with your product or services.
This is a surefire way to get paid faster.
With these bulletproof invoicing tips, you’ll be able to make the whole process that much less painful. That means faster invoices for you and money in your pocket much more quickly. If you take the above 7 tips into account you're almost sure to avoid late payers and improve your cash flow. After all, cutting your average payment time from 72 days to less days means that you will have more working capital. This helps you to reinvest more money into your business and grow faster.