Invoicing: Effective tips for small businesses to get paid on time
With the many hats a small business owner wears at a time, invoicing can turn out to be a time-consuming process. However simple it may sound, it is a crucial and complicated process.
How your small business invoices clients can strongly determine everything from timely payment to retaining loyal customers. It is important to remember that invoicing should not just be about getting paid — it is about getting paid on time. Timely payment leads to predictable cash flow, which helps your business stay on track with projections and payments.
Effective invoicing can speed up the process, enabling small businesses to exude professionalism. When and how you go about doing this will depend on the kind of business you run. Retailers, for example, expect cash, card, or electronic payments to be made before goods are delivered. Whereas, service businesses and most other suppliers issue invoices mid-way or after delivery of work.
Regardless, invoicing is an essential part of keeping any business afloat. Here are some protips to help you optimise your business’s invoicing system:
YOU MIGHT LIKE
One of the best ways for small businesses to improve operations is by upskilling and training. From certification to free courses, the options available online are endless. Independent small business owners could opt to take on the challenge themselves or invest in providing the knowledge to an employee.
For an intensive explainer, the E-Invoicing Solutions Certificate (ESC) was designed to provide a comprehensive and practical knowledge of the processes and benefits of implementing e-invoicing solutions to grow a business. This programme will take three house to complete, followed by a 60-minute exam.
If you aren’t looking to set aside a budget for training, with free courses – you won’t have to. With the How to Make a Professional Invoice course, you will be able to learn the basics of creating an invoice using Microsoft Word or Adobe Photoshop.
Automation will not only help you to compare your cash flow projections with your actual revenue but will also save on time spent creating billing documents and analysing customer information. The right software can automate your invoicing process and cut down on mistakes made by manual billing.
While there are plenty of options out there, Ballpark is frequently used for time-tracking and invoicing. It’s simple to use, has powerful reporting tools, and delivers great-looking invoices and estimates.
Invoice immediately after completion
If possible, send out a written estimate before any work is done, then follow up with an invoice afterward. This will help solidify your client’s expectations and avoid confusion down the line.
Creating this kind of consistency in your billing can also speed up payment. Invoicing software often has powerful features for creating estimates.
For example, in Ballpark you can create estimates for a customer and then turn the accepted estimate into an invoice with one click.
Number your invoices
If a client has a question about an invoice, numbering them will help you find it quickly. You should number your invoices to track payments for easy reference later. This should be no problem when utilising invoicing software.
Some invoicing experts recommend that you avoid labeling your first invoice 001, as customers can perceive a higher number as a mark of established experience. So, start with a higher number.
Set short due dates
Be precise when you specify payment terms. Customers often view phrases like “payment due upon receipt,” to be a bit vaguer than an actual date. 30 days is a standard arrangement, but small business owners are free to tailor payment terms to best suit both their needs and their clients.
Make payment easy for customers
Consider letting your customers pay you online. It’s easier on them, which means it’s easier for you to get paid. Some platforms charge a percentage on transactions and others a flat monthly fee. This decision will be dependent on the nature and volume of your business.
There should be a clear plan for customers with late payments, and this information should be on the original quote. A specific amount is more common than a percentage. This simply shows that as a professional, you expect clients to live up to a bargain the same as you do.