You need billing to be fast and accurate.
1. Set a billing schedule
It’s
tempting to give preference to paid work and put invoicing off. But no work is
paid without invoicing, so make it a priority. Pick a day and time of the week
to get it done, then lock it into your schedule. If you’re just too busy,
great, hire a bookkeeper to help.
2. Invoice more often, get paid more often
Invoicing
can be such a chore that a lot of businesses only do it once a month. And that
doesn’t make sense because invoices are paid late. When you’re slow sending
them, and your customers are slow paying them – it’s a bad combination.
Consider
billing weekly. Or, if you do lots of odd jobs, send invoices as soon as the
work is done. It prevents a backlog from forming, and it gets your customers on
the clock sooner. Money should start flowing into your business more
consistently, rather than in fits and starts.
3. Connect quotes and invoices
It’s a
good idea to get quotes signed off before starting work. Use descriptions from
that agreement in your invoice so customers can see they’re getting what they
paid for. It should help avoid misunderstandings or invoice disputes.
4. Use invoice templates to their fullest
potential
Many
businesses use invoice templates from spreadsheet software. They can save a lot
of time if you:
·
save templates (with pre-filled information) for
specific types of jobs and customers.
·
build in formulae that total charges and add taxes for
you.
Make
sure you’re getting the most out of your templates. As you grow, you may
eventually move onto a dedicated invoice maker.
5. What could an invoice maker do for you?
Specialist
software can speed up the invoicing process by:
·
learning the price of your products and services
·
calculating taxes and automatically preparing paperwork
for filing
·
doing daily bank reconciliation to tell you which
invoices have (and haven’t) been paid
·
working from your phone, so you can send invoices from
anywhere
6. Track time and materials better
Figuring
out the time or money you’ve spent on a job can be slow work. If you need to
open a diary, refer to old emails, and sift through dozens of receipts to piece
everything together, then it’s probably taking too long. You really need one
source of truth for time and one for expenses.
Not
everyone is good at staying this organised, but there are apps to help:
·
Time-keeping apps allow you to clock in and out of jobs
from your phone.
·
Expense apps allow you to photograph a receipt and
attach it to a specific job so the information is there when you go to make an
invoice.
7. Should you accept online payments?
You can
get your money up to 30% sooner just by offering a convenient payment
method. There are a lot out there, including debit and credit card,
automated clearing houses (ACH) like PayPal, or bank transfer. It costs nothing
to set any of them up, although most providers charge a transaction fee.
If your customers already pay on time, then you’re probably ok. But if they’re
slow, an easy payment option could speed them up.
8. Train your customers to pay on time
When
you first bill a new customer, call them to check the invoice has everything
they need. It’s a nice courtesy but you’re also taking away excuses for late
payment. If they miss the due date, call the very next day. You don’t have to
be aggressive. You’re just making sure nothing’s wrong, and signalling that you
watch this sort of thing closely. Keep this up over the first few invoices to
set expectations.
9. Chase invoices like you really want them
The
most important part of the invoicing process happens after you’ve sent the
bill. Because no matter how accurate, professional or well-formatted your
invoice is – it probably won’t get paid on time. You have to follow up. Remind
your customer when the due date is up and, if they still don’t pay, get on the
phone. It’s not fun but it’s hugely important.
Build the perfect invoicing system
A smart
invoicing system will help you get bills out faster, and money in sooner.
That’s good for business. Use these 9 questions to review your invoicing
process regularly, and keep from falling behind.