Published: 20th Nov 17
Categories: Money, Success
How to Streamline Your Invoicing Process
How to Streamline Your Invoicing Process
Whilst you may believe invoicing is a simple process, there is actually much more you should be aware of to make your invoicing technique both simple and effective.
By taking the correct approach, you can ensure you are paid on time by customers in the most efficient manner. Here are some top tips to bear in mind on how to streamline your invoicing process:
1. Know how regularly you should be invoicing
Dependent on your business type, you should have a clear idea on when to invoice your customers. For example, large manufacturers are more likely to do so on a monthly basis, whereas freelancers and small businesses often send their invoices out weekly. It is always a good idea to find out your customer’s payment schedule and also take into consideration what is best for you; therefore a bit of negotiation may be required.
2. Accept the responsibility
If you have recently started your own small business, it can be hard to accept the responsibility of having to chase up payments. An employee is used to having their wages sent instantly into their bank account, whereas a business owner is expected to keep track of their own accounts to make sure they get paid.
Ensure you send your invoice as soon as the work has been completed. Doing so will smooth out any issues at a later date and avoid confusion.
If you are aware of any late payments, be sure to contact the customer immediately and ask the reason why this may be. If they refuse to acknowledge you or pay their bill, you will need to take things further. Whilst it may seem embarrassing to put your foot down and be demanding, you must remember that the customer should have agreed to specific terms before you took the work on, therefore you are entitled to have received your payment on the specified date.
3. Keep records of your work
Be sure to make a note of the time and hours you spend on particular projects so you are invoicing clients correctly. You may decide to use software or spreadsheets to track your work on an hourly or daily basis, to prevent having to guess the finer details at a later date.
4. Work out what payment methods you will accept
When determining which payment methods you will accept, always think of the easiest method for the customer, so they are more likely to pay on time. Whilst it is beneficial for clients to pay via a variety of methods such as BACS, Paypal or Credit Card, you should also bear in mind the best payment option for you.
If you have accounting software, you may be able to add a PayPal link to an invoice, so clients can pay instantly without having to go to too much effort.
5. Define payment terms
Before sending your invoice to your client, ensure you have clearly stated the payment terms at the top of the invoice. You should write the date the invoice was sent and the deadline date for payment – for example, ’14 days from date of invoice’.
You may also decide to state your penalties if the invoice isn’t paid by the deadline to make late payments a less regular occurrence. Always chase up late payments by contacting the client with a polite reminder email of the terms of payment and the date it was due.
6. Make a connection with clients
Another effective approach would be to introduce yourself to clients directly in order to make more of a human connection with them. Instead of sending a dull and lengthy email with invoicing information, you may choose to make a phone call to your clients and discuss such matters over the phone. You should state that they can contact you at any point should there be payment issues.
Here are some helpful hints on what to include on your invoice:
1. Full name and address
2. Invoice date
3. The name of the person who is responsible for processing your invoice
4. Legal requirements
5. Cost details
6. Invoice total
7. Payment deadline date
8. Accepted payment methods
If you need further assistance on invoicing, please contact the team at Virgate Accounts – we’re here to help!