Constraints with cashflows significantly affect the growth of any business, especially small businesses. Businesses often grapple with poor cash flow due to non-payment or delayed payment from customers who take their own sweet time to process invoices. Although vendors/suppliers cannot always expect their customers to pay on time, you can always prevent any invoicing errors that would certainly result in a late payment.
Better customer invoice management makes the life much easier for businesses that need to be paid in time in return for the products and services they supplied to their customers.
You may want to know how important proper invoicing is if you are a business owner. Here are 7 invoicing lessons every business owner should follow.
Setting Payment Terms
Set payment conditions on your invoices that are most convenient for your business. It is not ideal for businesses to wait for 3 or 4 weeks or until the month-end to get paid. Instead, payment plans should be finalized, on mutual agreement, that benefits the vendor the most. When working with customers, make sure to spell out the invoice schedule and payment deadlines. Also, inform customers about late fees, payment methods, and how late or missed payments are treated.
Insisting for a share of the payment upfront or split up during the project’s life cycle is also a brilliant idea.
Following the Due Payments
It is important to follow up on the pending or past-due invoices at the earliest. Missed payment deadlines are always a cause for concern. To get to the bottom of a problem quickly, contact clients directly via phone or video chat if the email follow-up fails to receive a quicker response from the clients.
If you do not possess the financial means to employ a monetary team to investigate late payments, automation is a viable choice. A virtual assistant or invoicing software will save you money while providing the same level of service.
Automating Invoicing Process
When you automate an invoice with good accounting software, you remove the human factor and make it far more probable that the invoice would be sent on time and consistently, raising the chances of quicker processing of the invoice by the clients.
Request permission from customers who utilize your services regularly to set up an electronic invoicing system where the billing process happens automatically. It would be satisfying for your clients to know that their money will be transferred to your bank account on the requested day.
Invoice Branding
Invent your invoice as a promotional tool for your company. Include your company’s logo, fonts, and any other design elements that you believe can distinguish your company from the competition. Make an invoice that stands out and is quick / easy to read making it difficult to ignore in general.
Sending a customized, branded invoice helps you create your brand, assisting you in better brand recall and authenticity.
Accurate and Relevant Detail from Beginning
When onboarding a customer, make sure to exchange accurate information. Inquire specifically about the right person who should be contacted with regard to invoicing. Collecting accurate information about the people who is in charge of orders too is critical.
It is best to become acquainted with the accounting department of your long-term clients so you can quickly contact them with questions. Sending invoices directly to the account manager ensures that they receive the attention they need rather than getting lost in the shuffle.
Sending Invoice Digitally
A paper-based invoice method is outdated because it is time-consuming and costly; instead, there are several excellent digital resources available for sending invoices. Invoices sent digitally save money on postage and office supplies, and they are even easier to track.
After sending the invoice digitally, make sure to request for a quick analysis from your client. Your client will value your punctuality and professionalism.
Invoice Backup
Invoices serve a significant role when following your business’s profit and expenses. Invoices are used to help with your detailed income and derivations on your expenses. Having an exhaustive, coordinated, and effectively open receipt record can help planning charges, following consumptions, and setting up a financial plan for your business.
Summary
Businesses should explore new technologies and tools that help them streamline the process of creating invoices in the right way, collaborate with the clients seamlessly to get the invoice processes in time and track the payments.
SkyscendPay, an AI-based end-to-end invoice management software, transforms businesses, both the vendor and buyer sides, by automating the entire invoice processing workflow. It is user-friendly, easy to use and manage the invoice workflow, right from the creation of invoices to the processing of payment, covering the entire life cycle involving purchase order, tax regulators, purchase departments, finance, and accounting teams.