You know that to get paid you need to invoice your clients. That’s the easy part.
But how can you make sure you get paid on time? It’s impossible to control just when your customers finalize their bills, but there are things you can do to ensure speedy payment and to ensure that your invoicing mistakes haven’t contributed to a longer-than-expected payment period.
Have you ever sent out an invoice only to realize after it hasn’t been paid that it was your company that made some administrative mistakes? Maybe it was an incorrect address or customer name that was missed. It’s important to catch these errors before you send those invoices. Particularly for small businesses, this careful checking is crucial to avoid delays in payment.
Did you know that 39% of invoices aren’t paid by the final due date?. If your business is adding to that problem, it’s important to know how you can avoid such mistakes and keep your business growing.
Make financial administration a priority so that your company flourishes. If you control how your invoicing is managed cash will flow effortlessly.
Here are some common invoicing mistakes you should never make:
Forgetting to Invoice
Sounds easy, right? Regardless, this is an important first step in the invoicing process. Sometimes invoicing just gets forgotten by busy business owners.
- Document your invoicing due dates as well as client payment dates
- Set reminders to send invoices and make invoicing a priority
- Invoice as soon as possible after the service has been provided so your client doesn’t forget you or the service they paid for
- Send invoices after milestones or when the project is completed
- Prompt invoicing means a higher chance of being paid on time
Not Carefully Checking Invoices
We can’t stress this enough: go back over each and every invoice to ensure accuracy. There can be no room for error on these documents, and leaving out essential details or information can be catastrophic for timely payment.
- Make sure each invoice has the correct address, client name, contact information, and financial details
- Check every single invoice a few times before you send it out
- Dates and services rendered also need to be accurately recorded
- Watch for spelling mistakes! Invoices need to be professional
Not Clearly Displaying Contact Information
Of course it’s important to have carefully checked your client’s information to ensure accuracy, but checking your own is just as crucial.
- Establish clear contact information for your business on each invoice you send
- Make sure your clients can reach you promptly if they have a problem or question
- Names, phone numbers, and email address should be prominently displayed near the top of an invoice or close to the fee amount
Not Clearly Displaying Payment Terms
Carefully checking over each invoice and ensuring accurate contact information is important, but without the correct payment terms, how will your customer know how and when to pay their bill?
- Advertise your company’s payment methods clearly
- Embed links to payment platforms for online billing and payments
- Set out a comprehensive statement about what you’ll allow for settling outstanding debt and what penalties and incentives you have in place for late or early payments
Keeping track of invoices is not only important for your tax records, but it is also essential in case of any potential payment disputes. By maintaining organized invoice records, you will be armed against tax discrepancies and penalties, as well as conflict with clients.
- Track, maintain, and review your invoices on a continual basis
- Consider a cloud-based service to safely store and catalog your billing data
- Communicate any changes to your clients immediately, such as additional hours
- Every change and communication with your clients must be put down in writing, agreed by all parties involved, and recorded and saved
- Streamline your billing process to help improve your payment outcomes
Rolling Over Payments
It may be a tempting practice to roll over payments, particularly for returning clients, but this is generally a bad idea. Late payments are common, yes, but to give into this inevitability would be a mistake.
- Routinely review outstanding invoices
- Highlight invoices that are the most overdue, and ones that are worth the most
- Have a procedure in place to deal with overdue invoices
- Consider overdue penalties, worth a percentage of the overall fee
- Give early payment incentives as well as penalties
- Change your credit terms
- Offer payment alternatives to your delinquent clients
- Don’t stop trying!
Not Following Up
Haven’t received a payment? Don’t ignore it. Follow up with your client until you get paid. There are lots of ways to manage this without resorting to discourteous communications that ruin your customer relationships.
- Create customized reminders
- Consider outsourcing to a software program that can create automatic follow-up emails for your invoices
- Send your reminders on set dates, automatically
Not Going Paperless
We all know that going paperless is better for the environment, but did you know that automating your invoices makes managing your finances much easier too?
- Digital accounting solutions are everywhere, and for good reason
- Outsourcing to an electronic invoicing option speeds payments
- Online options offer a greater array of payment options for your clients, making settling their bill easy, accessible, and safe
- Financial information and data will be securely stored and organized for your perusal
- Reports are generated for your business which happens automatically and saves you time and money, as well as highlighting potential problems early
Invoice Tracker allows you to avoid these common accounting pitfalls. Use our customized, set-and-forget invoice reminders and set them up to be sent out on a schedule arranged by you. Keep your payments up to date with automated emails, integrations with your other accounting software, and detailed reporting. Reconcile those outstanding bills today by trying out our free, 30-day trial. No credit card required.