Business owners know that invoicing customers quickly means faster payments and better cash flow.
However, this only works when your customers pay you on time and when you remember to send out the invoices in the first place. With that in mind, read on to discover how to improve your invoicing process to get slower payers to speed up and ensure the entire cycle is in hand.
Use Specialist Software
If you’re forever forgetting to invoice a job once it’s done, you’re not the only one. When you’re a small business, perhaps it’s just you working there, getting the job done and moving onto the next is vital, and the more work you can do, the more money you’ll make. Of course, there is the matter of invoicing, and when you’re in a hurry, this is the part that you can forget. A few weeks or months later, and you might be wondering why your cash flow has dried up even though you’ve done plenty of work. It will be because the people you did work for never received an invoice.
Using specialist invoicing and accounting software to ensure that you complete all the elements of the work you’re meant to do and you get paid for it can really help. There are many different options to choose from, and it might depend on what industry you’re working in as to which software you decide on. You can opt for revenue cycle management software for the health industry, for example.
Have A Well Designed Invoice
The invoices you send out don’t have to be works of art, but they do need to be well designed. The easier an invoice is to read, the easier it is to understand, and the easier it is to understand, the sooner you’ll get paid – in theory, at least. There will always be some clients who habitually pay late, and it is wise to know who these are and account for their lateness if you can. Alternatively, you can offer a discount for early payment as this might make them pay more quickly.
A good design for your invoice will include simple fonts and type that is an easy size to read. The information on the invoice should be organized in such a way as it all makes sense, but don’t put too much information there – this can be difficult to process and cause the client to put the invoice to one side to deal with later. Even a fold in an awkward place could delay payment if it means the information is not clear.
Have Specific Payment Due Dates
Most invoices will have the payment terms written on them, and this is a good start, but payment terms can be confusing, and people can make mistakes. If you choose to include specific dates when the payment needs to be made by, everything will be much more straightforward, and there will be no reason not to be paid.
As mentioned above, a discount for early payment could be considered, but equally adding interest to any late payments might be something you’re willing to do.
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