Invoicing is a major problem for small businesses, with a significant number struggling with late payments, while others regularly find a backlog of invoices piled up in accounting, but no matter the problem, any issue in invoicing has a trickle-down effect by holding down earnings.
Luckily, by making a few simple improvements to your invoicing process, you can turn those financial issues around. Most companies make these four mistakes with their invoices, so set yours apart through strategic improvement.
No Due Date on Your Business Invoice
One surprising error commonly seen when assessing small business invoices is that the invoice doesn’t include a due date. Why? Many businesses don’t include a due date because they assume, in good faith, that if they invoice in a timely manner, their clients will return payment in the same fashion.
Another reason companies leave the due date off their invoices is because the intended payment schedule was stated in the original contract – whether that’s upon receipt, within 30 days, or some other time frame.
The problem: clients aren’t going to refer to their contract for payment timelines, and not all clients will pay invoices upon receipt. Save everyone – especially you – the headache and write the expected payment date on the invoice.
Writing and reading invoices is an art form and because they vary between businesses, they can quickly become sloppy. For example, maybe some individuals at your company itemize their invoices while others don’t.
It may seem like a small detail, but it’s unsettling for clients and makes your business look less professional. Avoid this problem by using a standardized invoice template that includes all important information.
If individual team members write their own invoices, it’s also worth reviewing what you want included on each.
Failure To Brand
Using an invoice may be a good way to make sure your invoices are complete and consistent, but they tend to lack character – and that means they get lost in the piles of equally dull looking invoices and even overlooked as already paid. Make your invoices stand out and increase name recognition by branding your invoices.
Branding your invoices also makes them look more professional and, if you use digital invoices like many businesses today, it doesn’t cost extra to add color to your invoices. Here are a few online invoicing companies to help you easily with this.
Lack Of Follow-Up
It may not appear on the invoice, but when businesses send out invoices and aren’t paid promptly, too many fail to follow up. Instead, they just stew and wonder when payments will arrive. If you want to succeed, though, you can’t be passive – you need to be persistent.
While some clients will really be holding back payment, often you’ll find that an invoice was accidentally sent to the wrong department, got lost in the shuffle, or simply forgotten, and that payment follows promptly. Follow up on payments that are nearing their due date as well as those that are overdue, and don’t be reticent about applying late fees for unpaid invoices.
Invoicing is part art, part science, like most other elements of business, and it takes time to get it right. If you avoid the most egregious invoicing mistakes, though, you’ll be miles ahead of your closest competitors, and that much more likely to be paid on time.