Invoicing is a task that can feel tedious and perhaps seem so straightforward as to not need a lot of attention. After all, it’s a standard task, and everyone has to do it, no matter how cumbersome. What’s the big deal, you might wonder. But businesses of all sizes need to understand how crucial this piece of operations really is, especially in terms of positive cash flow.
And even if you do know just how important it is to the overall health of your company, it is never just as simple as sending out invoices to your clients with a due date and amount owed. Invoicing problems aren’t always down to a customer not paying. Often, payment delays happen as a result of invoicing mistakes made by the business itself.
Many things need to be considered even before an invoice gets sent out after the completion of a job or service: the tone and professional language used, ensuring precise calculations and taxes, knowing when to send additional reminders when an invoice is overdue, and many other tasks that are easy to get wrong and may lead to delays in payment. You may have left out an option for a client to pay. Often, there is no way to know whether or not a customer has even received an invoice until it has been paid.
There’s a pretty good chance you have made at least one of these mistakes, right? So let’s take a look at some of the most common issues and how to avoid and solve them. Luckily, they are all easy to fix.
Here are the top business invoicing concerns and what to do about them:
The secure filing and storing of confidential and sensitive information needs to be a top priority during the invoicing process. The essential demand for this security cannot be overstated: when you have been trusted to maintain the integrity of private information, you have a (legal and personal) responsibility to uphold your end of the bargain.
- One of the biggest problems in document management systems is in the filing and maintenance of personal records
- Paper invoices and manual data entry equate to paper and supply costs, as well as piles of physical records that are easy to lose track of and have a higher chance of a breach of privacy
- Cloud-based software ensures the top security for banking and other personal information and a way to more easily upload and file data
- Use software that allows for the transfer and viewing of invoicing data from anywhere, at any time. This freedom means knowing the exact status of your records from your desktop or handheld device, and subsequently have the knowledge to spot any inconsistencies or potential problems
- Minimize the risk of losing invoices with a digital storage system
Missing or Inaccurate Data
Losing important information, or struggling with inaccurate calculations is a big risk when your invoicing system is paper-based. Switching as much of the process over to software will ease a lot of liability, but it is still important to be vigilant.
- Consider a program that offers customizable invoices where it is easy to quickly input a logo and information pertinent to each individual client
- Automated invoices often include features that allow for automatic numbering, calculations (including tax), current and accurate currency conversions, and easy-fill address and client information to lessen the possibility of errors
- Payment information can be added to automate invoice payments, so that clients have easy and fast methods for paying the balance
- For best results, invest in an invoicing software that tracks your time and transfers that information to the invoice, so that every second is accounted for precisely
Perhaps the biggest issue is not being paid on time. Although this problem may seem to fall entirely on the client’s shoulders, there are things you may be doing that unintentionally make delays more likely.
- Always offer multiple payment options. This one’s a no-brainer: the easier you make it for customers to pay their invoices, the more likely they will do it on time
- Fast, efficient, and safe payment links can be embedded right into online invoices, so your clients will have the option of paying at any time, from the privacy of their own home or when they’re on the go
- Hit the right tone. Customizable invoices and reminder emails mean that there is an immediate balance of courtesy and professionalism built right in, so you don’t have to worry about preserving those important client relationships. Showing consideration in an invoice can increase how quickly an invoice is paid by 5%
- Chasing overdue payments is difficult and takes a lot of time you could spend working on other parts of the business. Reminder emails are an effective way to follow up on unpaid invoices, and can be set at intervals chosen by you
- Have everything in writing before a contract is even begun. This information should include payment schedules, incentives or late penalties, terms, deadlines, and preferred payment information. This goes a long way in preventing future discrepancies or disputes
There is so much you can do to prevent and avoid these common invoicing problems altogether. With all of the available technology, geared specifically to business needs, it becomes such a simple fix to research just how to reverse slow workflows.
Choosing a platform that will work best for your business is an important decision. This choice will determine how well you can solve these common invoicing concerns. Invoice Tracker is an add-on to your current accounting software that automates your accounts receivable to improve your cash flow and get paid faster. Try out a free, 30-day trial today. No credit card required.