An invoicing process that is complex can create a barrier between the close of your deal and the payment on your account, which could delay the process of payment as the company grows and more complex, the difficulty of collection and billing increases.
A simple invoicing software may be affordable, but it won’t be successful until you know the specifics of your billing process flow. Then, when you have an invoice process for customers that can run smoothly, you can implement an automated billing system to streamline the process.
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Select an invoice system.
Moving to an electronic invoicing system allows you to design and pay bills electronically. So, no more waiting in line at the grocery store to get the cash.
Also, it saves money because you do not need to purchase postal charges, ink, and paper, But that’s just the beginning.
Many electronic invoicing platforms allow you to create, manage and monitor invoices using your smartphone. It means that you can carry your office wherever you travel. In addition, you can automate invoicing by setting up regular payments and reminders for payment.
Some invoicing platforms allow customers to pay until the invoice is paid. Other platforms, like Due, have features such as time tracking software, expense management software, and project management software.
Enter customer details and typical billing amounts/items.
After you’ve decided on an invoice system, now is the time to organize your business so that you can begin billing clients right away. First, it is best to begin to include the information of your client to the bill. It will include their name and email address, billing address and mailing address, and there the preferred method of payment.
The information you store allows you to send invoices in just a few minutes or set up a recurring payment. That is ideal if you are running a business that relies on subscriptions or is being hired for the duration of a project.
It is also possible to save time while making bills by entering the typical billing cost only once in your system. If, for instance, you’re a freelancer, you’ll enter your hourly rates into the program. Then, it will automatically calculate the total amount.
Determine payment terms and policy.
The terms and conditions of your payment define when and how invoices are paid. As a freelancer, you must discuss the terms and conditions with your clients before payment. It will ensure that they aren’t shocked when they receive bills from the middle of nowhere.
It is also important to know the payment timeframe and preferred payment method for your customers. It will ensure that there are no delays in processing the bill. For instance, your policies and terms must be flexible to ensure that clients can easily pay for the invoice.
Make your invoice professional.
You may be surprised, but the style of your invoices is important. The reason is that poor-designed invoices can lead to confusion and irritation. They also display that you aren’t a professional who won’t convince clients to pay their bills on time.
Check out this hilarious post in Medium about the impact poorly designed invoices can affect individuals. An invoice that is well designed will show the customer that you’re an expert. As an expert, you’re entitled to be paid. This invoice is also different from other generic and boring invoices that your clients get.
The process of creating an invoice can seem too complicated. However, it’s quite simple, as it is a reflection of your company’s image.
Use the carrot along with the stick.
Even if you follow the best practices for invoicing, there will come a time when your client does not have enough money to cover your invoice. Even worse? Clients may be waiting until the very last minute.
Don’t lose your cool. Instead, develop a plan to entice your client to pay you on time. You could, for instance, make the following carrot stick combination:
It could also be a discount on the total sum of the bill if you pay the invoice early. To pay the stick, the possibility of implementing late penalty charges if the invoice falls past the due date. It could be the case of a small portion of the amount of a flat cost.
Maintain good records.
Be sure to keep notes of the work that you’re working on. If you work as a freelancer, ensure you track the work you’ve done. If you are charging per hour, ensure you have a time tracking to prove your paid amount.
You must keep track of it from inventory through to when you publish tweets or whatever you’re supposed to measure. You need precise records to back the payment. In this way, you can defend your claims in case clients dispute the invoice.
It is important to keep the records of contracts and other documents that you could keep and refer to. However, be sure to manage your documentation and paperwork to ensure that nothing falls between the cracks and ends up stifling your progress.
It’s also essential to track your payments, including the invoices that have been paid and those not paid. Invoicing software can perform this task for you; however, you shouldn’t completely depend on automated systems. There will come a time where you’ll have to pick up the phone to ask the customer to explain why the invoice is not paid on time.
Summing it up
The majority of invoicing software is simple to use right from the beginning. However, certain systems might require a professional to guide your employees or you to use the software correctly.
Advika Apte is a serial entrepreneur at Techimply, with writing experience for Accounting Software in the technology-driven field. She’s keen to share her knowledge on a few technology-related topics with readers that can assist any kind of business. Her passion for helping others keeps her motivated.