6 Invoicing Tips Small Businesses Should Follow
Invoicing is considered as the lifeblood of small businesses.
17:55 12 September 2020
In fact, without effective and smart invoicing, a small business won’t have a chance to achieve success. As a small business owner, you must know what payments are still pending, how to make invoicing much simpler for clients to pay on time, and which invoice has hit your bank account already.
Effective invoicing using a customizable and easy-to-use software like Wave can make a huge difference in how you get paid. To ensure timely and reliable payments, here are some invoicing tips for your small business:
- Label Or Number Your Invoices
If your client has questions regarding an invoice, it may come in handy if your invoices have labels or numbers. Proper labeling can help track payments easily and also make your small business more credible. However, when numbering your invoices, consider starting with a higher number as some customers perceive high numbers as an indicator of established experience.
- Automate Your Invoicing Process
Even if you’re comfortable with a paper-based invoicing process, it takes a lot of money and time to compile and send invoices. One of the invoicing tips you should follow as a small business owner is to automate your invoicing process using online tools and software.
With invoicing tools, you can send or create electronic invoices from wherever you’re working and save on costs from purchasing envelopes, postage, ink cartridges, and papers. You don’t also need to make a trip to mail the invoices because your software can send them to the email addresses of your customers.
You can also automate acknowledgements and reminders since your software can send them on your behalf, saving more time that you can use to work on other important things. Moreover, streamlining your invoicing process also reduces the risk of human error.
- Don’t Hesitate To Charge Interest On Late Payments
It may sound like a bad idea for maintaining good relationships with customers and client, however, you should never hesitate to penalize your customers who have paid late. Unpaid invoices aren’t just a financial burden, they can also weigh heavily on your emotions. Your business must have a clear plan for late payments. See to it that you inform your customers about this before letting them sign a deal with you. But you should also ensure that your fee isn’t excessive or exorbitant to avoid antagonizing your customers.
- Always Send Invoices On Time
It may be easy to forget to send invoices, particularly when you have a lot of things in mind. However, if there’s one thing that you shouldn’t forget in invoicing, it’s to send your invoices on time. Don’t expect to get payments on time if you can’t even send invoices in a timely manner. So, as soon as the debts are incurred, send invoices immediately to your customers. The longer your delay is when sending invoices, the longer you’ll need to wait for the payments. If you don’t want this to happen, make it a habit to send invoices on time.
- Use Standardized Templates
Without standardized invoicing templates, discrepancies may crop up in your invoices in the long run. Each invoice should look the same and must contain the same information such as your email, business address, phone number, company logo, fax number, and website. It must also include the contact info and name of the individual or company being invoiced.
The best invoicing template provides your recipients all the details they require to make payments and when to do so. It also includes information regarding credit terms, penalties for late payments, and discounts for early payment. With this kind of simple invoicing upgrade for your small business, your customers are more likely to pay their bills on time.
- Consider Setting Short Payment Terms
If you offer a short timeframe for payment, expect to get paid faster. Some small business owners prefer payment terms of a month or less, but you always have the freedom to choose your payment terms. For instance, you may request payments within one or two weeks. But take note that some debtors pay two weeks late, so you must factor it when you’re setting your payment terms and keep the extra time in mind for your cash flow projections. If possible, set payment terms within 13 days if you want to get payments within a month.
Running a small business isn’t easy, but you can make things simpler and more convenient for you if you follow the above invoicing tips. Once you put extra effort to get your invoicing set up properly, you’ll save more time and reduce costs. Take one step at a time and be consistent when incorporating these tips in your daily invoicing process.