Major common invoicing mistakes, and how to avoid them
Every kind of business faces invoice-related issues on a regular basis. Avoiding invoicing mistakes is important to skirt confusion among customers and delays in payments. Here are some common ones and how you can avoid them.
Businesses need to create invoices if they want to get paid for their products or services. Every business owner wishes for timely payments to ensure the smooth running of their business. Invoicing tasks seem simple to most enterprises: raise an invoice and get paid. Unfortunately, that’s most often not the case.
Every kind of business faces invoice-related issues on a regular basis. And invoicing mistakes can cause confusion among customers, delays in payment, or disputes between buyer and seller. Seeing how it can downgrade your organisation’s reputation and value, it is crucial to ensure these invoicing mistakes don’t happen.
Like most other aspects of life, knowledge and preparedness can help tackle these invoicing problems. Thus, you need to know the common invoicing issues that might arise during the accounting process.
Here’s a list of various invoicing mistakes, and possible solutions to avoid them:
Using manual systems
It’s quite evident that the manual process of invoicing is time-consuming and error-prone. But still, a large number of SMEs use traditional methods. The statements thus generated are vulnerable to duplication. Also, it’s likely that miscalculations happen in the manual process, which leads to inaccurate invoices.
Having an accounting software can eliminate all these discrepancies as it can automate most of the tasks, thus improving the time efficiency and accuracy of the entire process.
Sending invoice inconsistently
Sending invoices to your clients irregularly or on a different date each month is quite a common fault. Sometimes the invoices might get delayed because of unforeseen reasons. While this shouldn’t be a problem in most cases, it can get confusing for you and your customers. They will not be sure when you’ll be sending the invoice, which means you can expect payments to be delayed.
The solution to this is to work with pre-assigned dates. Sending invoices on a particular date will make things clear. Invoicing software can remove this inconsistency as they enable you to send invoices and payment reminders automatically.
Indistinct product/service descriptions
Invoice isn’t just a note that just shows all the amounts applicable; it also includes a brief product or service description. It is a way of connecting with the customers so that they can get to know what they are paying for. Thus, a clear and concise description matters in an invoice.
An invoice software allows you to save descriptions of different products or services so you can quickly include them in the invoice.
Sending an incorrect invoice, or sending the invoice to the wrong person
This can be the gravest invoice mistake one could make. While care should be taken to avoid it at all costs, it does happen, especially when it’s done manually. This could arise from mistyping the customer’s name or contact information.
This can be tackled by double-checking the information entered or cross-verifying it with the customer before sending the actual invoice. Even this can be a bit of hassle for accounts personnel. Having an accounting tool can come in handy as it can synchronise contact details, and customers have their own profile linked with an email address you provide. This way, there’s no chance of an invoice going to the wrong person.
Sending unbranded invoices
Generally, many business owners don’t accord much importance to sending out branded invoices. This can have a significant impact as branding is a crucial aspect of the business. Hence, business owners should take every opportunity, including invoicing, to brand their business.
A branded invoice will be unique, and it will be easier for your customers to recognise it. Moreover, it will also establish a sense of professionalism between the buyer and seller.
Apart from these, there are other mistakes that can occur while invoicing. There are many invoice tools for freelancers as well as other powerful accounting tools that can eliminate all these mistakes. However, one thing to keep in mind is that different enterprises have different needs according to their domain, so choosing the right tool and training the staff to utilise them will provide the best experience.
(Edited by Evelyn Ratnakumar)