Although it may not seem like it now, invoicing doesn’t have to be hard.
Understandably, many small business owners have a lot of tasks that they have to do on a daily basis. Because of all these responsibilities, they often don’t have the time and resources to spend on learning much more than they need.
However, that may also be the reason that they find invoicing so hard. But, like I said, it doesn’t have to be.
Today we’ll look at 8 tips to help make your invoicing a smooth and painless experience.
Create pricing policies first
The most important thing you can do to protect yourself from late paying clients is to make sure they understand the rules of payment before they even become your client.
That means that you need to send them pricing policies that will let them know how, when, and where you should get paid.
In your pricing policies, make sure to include whether you’ll require payment before you start a job, as well as how long you’ll allow your client to pay you.
Also, you should note any late fees, the types of payments you’ll accept and if you’ll provide the products or services before or after the payment has been delivered.
By getting these important points out of the way, you can be sure that your clients will be clear in your payment procedures.
Create quotations before each job
This one often gets overlooked. However, you shouldn’t ignore it. It’s important that you create a quotation (in addition to the policies above) before you accept each job.
These are meant to protect you against surprises or challenges to your invoicing after the jobs are completed or the goods are delivered.
When you create your quotation, you should iron out what you and your client’s expectations are, as well as how long you have to finish the job or deliver the goods. You should also state in exact details what the extent of your services are.
No matter what type of business you’re in, there’s always an opportunity to automate parts of your daily operations.
This could be in the form of social media marketing, customer retention, and even invoicing.
While many business owners love to use invoicing templates to get their invoices out, there’s actually a better way. Online invoicing software, which stores all the information in the cloud, can help you create and send invoices in less than one minute.
It’s important to note that it is in the cloud, meaning that all your information is always available as long as you have an internet connection, no matter where you are.
And with time and energy saved on invoicing, you can focus on the more important parts of your business.
Send invoices ASAP
Another important thing that many small business owners know but often fail to do is to get their invoices out as soon as possible.
The reasons for this are obvious: the faster you send out your invoices, the faster you’ll get your invoices paid.
That’s because invoicing processes in your client’s company works in different cycles. If you miss the accounts payable cycle, you might have to wait another 30 days.
One great tip is to start your invoices even before you’ve finished the job or delivered the goods. That way, you can just fill in the specific details once the job is done and you can get your invoices out much faster.
Be clear in your invoices
While invoices are legal documents (after they’ve been agreed to by both parties), you don’t have to use language that is very academic and high-falutin’.
In fact, you should plainly and clearly state what the invoice is for and why it is being sent.
This is because one of the most common reasons that invoices are denied, challenged or delayed is because all the necessary information is not included there.
Therefore, they put off dealing with it until they can get more information, meaning at minimum it’s delayed, or worst case, sent back (which causes a lot more delays).
Add late fees
Some small business owners do not like the idea of including late fees for late payments because they think it might cause the clients to become unhappy.
However, it is there for a good reason: incentive. Late fees incentivize your clients to pay on time by making sure they know there is a punishment for paying late.
Just make sure that you’re fair in your late fees. There should be one for your client (either as a flat fee or a percentage) and one for you as well. However, instead of a late fee, it is a discount that you’ll apply to the invoice in case you are late (for the same flat fee or percentage as the late fee).
Send emails for late payers
Be sure to remain vigilant in your invoicing. If your client is near the due date (the standard 30 days or, even better, 15 days), then you need to notify him or her of their approaching overdue status.
This is best done by sending a polite late payment email reminder. The word ‘polite’ here is especially important. Studies have shown that emails with the phrases “please pay by [date]” and “thank you for your business” gets paid more than invoices and emails without such phrases.
Make polite phone calls
Although in this modern world email is the king of business communication, phone calls are still going to be crucial from time to time.
This is especially true when your late-payer client has not answered your polite email reminders, or has not yet submitted payment.
Although it is polite to send 2 or even 3 email reminders, sometimes it is more efficient for that third reminder to be a human voice.
A phone call has the added effect of making it a human request, as well as pressuring the client into giving a firm answer.
With these tips, you’ll be sure to see your invoicing getting paid faster and faster. And, of course, with faster invoicing payment, you’ll see your cash flow increase and your time and energy free up.
And with increased cash flow, time, and energy, you’ll be sure to expand your business and boost your profits.