A streamlined invoicing process is necessary to increase efficiency and reduce wasteful expenditure. It helps businesses in managing cash flow and focusing on other aspects apart from invoices.
In the absence of a well-organized invoicing process, many problems can arise such as duplicate invoices, late payments and inadequate funds. If you want to avoid these errors in your business, then here are 5 tips that can help you streamline your invoicing process for getting payments on time.
Defining your payment terms upfront is a great way of laying the groundwork before entering a business relationship. Some customers may have the tendency to make late payments, therefore, clarifying your payment terms in advance helps you get paid faster. Use clear words instead of ambiguous ones to discuss what is the due date and what are incentives of paying on time.
Be flexible in the types of payments you accept to make it easier for the client to pay for invoices. Sometimes the client is unable to make a payment due to the rigidity in the payment method accepted by the service provider. Therefore, look for other avenues of payment such as PayPal, credit cards and Bitcoin to ensure you get paid on time.
Generating invoices on a scheduled date is beneficial for both you and your client. You can avoid generating duplicate invoices this way and your client will know when to expect future invoices. Stick to a particular day of the week or month and send invoices on that day. Following a scheduled invoicing pattern will help you in predicting the payment trends and following-up on the previous invoices.
Instead of the old-school way of generating and mailing of invoices, use of latest invoicing tools, such as Xero and FreshBooks, help in streamlining the invoicing process. These tools gather all the information in one go and generate error free invoices. As a result, all the information is readily available at the time of invoice generation. Also, focus on designing your invoices with your company logo and colour scheme so that the client understands that this invoice is coming from you.
Most of the confusion in payments comes up because of lack of adequate information on the invoice. To facilitate on time payments, make sure that the invoice contains all the information required for requesting a payment such as your company’s name, business number, details regarding the products or services provided by you, the total amount due, the due date for payment and the terms of payment.
If you don’t have a streamlined invoicing process, then contact your bookkeeper or accountant and look for solutions. It will help you track the money entering your business and tracking the expenses as well.
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