Invoice management is critical to the success of a small business. Efficient and accurate invoicing ensures that the business is paid, in full and on time. Although invoicing is not always easy there are ways to get a handle on it and improve your process. Below are 8 steps to improve your business invoicing.
Step 1: Establish set terms
Established billing terms help you and the customer avoid surprises and maintain a positive relationship. Decide well in advance if your business will bill clients hourly or per product or project. After you have set your terms communicate them clearly to your clients and set the expectation of a billing deadline and consequences for any missed payments.
Step 2: Know your clients
Knowing your clients well is vital in communicating the payment and billing terms. Make sure you are working for a real person or company and the method your customer will be using to pay their invoice. Know in advance if your clients prefer to pay in installments or a lump sum.
Step 3: Be clear and consistent
Your business should create clear, detailed invoices and do so consistently. Include as many relevant details on the invoice as possible and make sure that the document is clearly labeled “Invoice” so that there is no confusion. List the products and/or services you have provided your client, even if it is only an invoice for a partial job. Be consistent by invoicing on the same day of every month which will help to ensure payment is on time.
Step 5: Use an invoice tracking system
Invoicing should be an integral part of your financial records and a tracking system will help keep things organized. An invoice tracking system will also aid with keeping a paper trail. It would be a good practice to send the client both a physical invoice and an electronic copy. In the event that payment, or lack thereof, must be disputed then you will have supporting documents.
Step 6: Send Reminders
In order to avoid missed payments and mitigate loss do not hesitate to remind clients of the payment deadline. Many businesses send a reminder either one week or even a day before a deadline. Clients may appreciate the reminder, particularly if it helps them avoid a late fee. If the reminders fail and a client does miss a payment do not be afraid to pursue that late payment.
Invoice management can be daunting, but by following these steps you can improve the process and your business will run more efficiently. Having an efficient invoicing process can also help the invoice factoring process. To learn more about the invoice factoring process contact Bull Market Capital: Business Funding Solutions today!