Why is invoicing crucial for your business? Invoices are essential not only for keeping track of sales, but also to keep track of overdue payments and to follow up with more formal actions. Having good invoicing practices will help in maintaining healthy cash flow for your business.
Here are some invoicing practices that you should embrace in your business.
Invest in a cloud-based automated accounting software, for instance Financio, that can create, manage, send and review invoices efficiently and on-the-go! Additionally, you can automate your recurring billing and invoice reminders so you can focus on your business!
Address invoice to the person paying
Make sure your invoice states and goes to the person who makes the payment, on top of the company name and mailing details. It may be different from the person who ordered the work so give them a call to confirm who’s in charge of accounts if you’re unsure.
Always use an invoice number
Invoice or reference numbers is important for tracking and retrieving invoices. It will make it easier to reference which invoices are being paid by a client who has received more than one bill for different jobs.
Break down each charge item
Your clients should always be able to see exactly what they are paying for and how much each item cost. They may need to reference this information later on, and there shouldn’t be any doubt about what they purchased when they review the invoice.
Keep detailed records
Don’t wait till invoicing time to work out your costs as it will just cause more delay. Keep a running record so you can easily refer to it when you need them. If costs are going over budget, you can let your client know, instead of sending them an expensive surprise at the end of the month.
Discuss payment terms
Clarifying this upfront means that there’s no confusion down the track. Make sure your invoice clearly shows the amount payable, due date and terms. Keeping those details close together will give your customers a quick reference point when it comes time to pay the bill.
Do not delay
Never put invoicing off, the sooner a client receives an invoice the sooner they will make payment. It also means they will receive it when your work is still fresh in their mind. Accounting software also allows you to create recurring invoices to streamline the invoicing process.
Follow-up is key
Do not be afraid to send a professional and friendly reminder before and when an invoice is overdue. Your clients are just as busy as you, and a reminder might prompt them to process it quicker.
Ready to start invoicing?