Whether your business is new, growing, or in need of a refresh, it's a good idea to streamline your invoicing system. You'll be able to crunch the numbers faster, and you can make the payment process easier for your clients. Get a leg up on this aspect of your business.
Keep Accurate Records
It goes without saying that keeping accurate records helps you keep the numbers accurate, too. Write down the details — time spent on the project, materials used, third-party costs — as you go along, in case you forget later. Having a paper trail will also come in handy if there's ever a dispute.
Make Paying Easy
Image via Flickr by Philip Taylor PT
Clients are more likely to pay on time when you accept the right type of payment methods. You may find that debit and credit work well for most people. Is there a way for them to pay online? Maybe you work with clients remotely. Would they rather send payments through a service like PayPal or Skrill? When you make it easy for people to pay you, the money will come in faster.
Create an Invoice Schedule
How often you invoice a client depends on what type of business you run and the size of the project you're working on. You can send invoices monthly, every two weeks, weekly, or even daily. You may want to break the payment schedule into stages of the project. Some business owners ask for a deposit or an upfront payment. Consider the amount of risk you're taking on and the amount of cash flow your business needs, and set the schedule accordingly.
A spreadsheet can work well for tracking inventory, services rendered, client information, and so on, but it's much faster to use specialized invoicing software — especially when your company gets bigger. Different products come with different features like automatic calculation of sales tax, time tracking, and compatibility with back-end accounting systems. Switching to certain types of software can even provide you with mobile apps so you can invoice your clients while you're on the go.
As soon as a project is complete or you've hit the agreed-upon payment mark, send the invoice. If you're too busy to do this right away, set aside a certain time of the week for catching up on this task. There's no guarantee that all your clients will pay on time, but you are far less likely to see the money at all if you wait too long. In fact, only 18 percent of invoices are paid after the 90-day mark.
Chase Late Payments
Nobody wants to deal with late payments, but they do happen. Staying professional is one of the most important tips to follow when it comes to late or non-paying clients. Keep all communication friendly, whether you're sending a reminder notice or speaking to them on the phone. If you feel like they're dodging you, be persistent.
When your company has a streamlined invoicing system, everything else runs more smoothly. Try following one of these tips today.