Good invoicing helps to promote good cash flow, which is an essential part of keeping your business afloat. Don’t see it as a chore – see it as an important and necessary task, and get it right so that your customers are more likely to pay and you’re more likely to succeed. Read more about our invoicing tips.
When and how you invoice will depend on the type of business you run. Retail businesses, for example, expect cash, card or electronic payments before the goods are delivered, whereas service businesses and most other suppliers issue invoices on or after delivery of work. Knowing how to manage your invoicing, and ensuring you’re making the right impression on your customers is all part of running a good business.
Here are 7 of our ideal small business invoicing tips:
1. Decide when to invoice – this is important for your cash flow. Usually, the best time to invoice is as soon as you have delivered to your customer. For some businesses, however, a monthly contract or retainer requires a single monthly invoice, whilst others can be done alongside the work. Knowing when you are going to invoice helps you to see when payments might come into your account and give you better cash flow management.
2. Set your payment terms – small businesses usually find that other small businesses are good at paying on time, but larger clients have longer and more involved accounting procedures and don’t pay for several weeks. Keeping your payment terms as low as possible helps you to set your clients’ expectations and allows you to chase the invoices after a shorter period. Why wait longer than you have to?
3. Create a professional invoice – if you use accounting software, there will be invoice templates that you can use to make your invoices professional, (see this invoicing demo from QuickBooks) – the more organised you appear, the more likely you are to get paid. Use your logo to make your invoice stand out, and make sure you have all your own registered and legal details, as well as the contact details for the person you are billing. Always check and double-check that you have got the correct figures in your invoice, including any additional costs and taxes.
4. Get an invoice-processing procedure – many small businesses use accounting software to manage their finances, and this is a great idea. However, don’t forget that you will still need someone to input details of new clients, manage any issues that arise from your invoicing process and handle client enquiries. Putting a clear process in place will prevent things from becoming muddled.
5. Get invoicing help – whether it’s in-house support or an experienced virtual office assistant from the right agency, having someone to keep an eye on your invoicing could save you thousands of pounds. Having someone who can talk to accounts departments, chase payments, double-check paperwork and handle debt collection could be the thing that keeps your business in business.
6. Send your invoice to the right person – your client contact might not be the best person to send your invoice to – it may get lost on their desk, not passed onto the accounts department or they may not have the authority to sign it off. To avoid this, find out at the beginning of your contract, project or sale who is the best person to invoice. Then you’ll be sure that your request for payment is being handled by the right department.
7. Keep it organised – you’ll need to have a good way of tracking your invoices so that you can reconcile payments against them. Give every invoice a unique reference number and ask clients to use that reference when paying. If you have an accounting system, it can do this automatically for you. Once your payments are reconciled, you can see which payments are outstanding and which clients need to be chased.
Whether it’s you, a member of staff at your company, virtual assistant or accounting software, following these invoicing tips will help you to manage your payments process more clearly and should result in faster payments and a better reputation for your business.
To find out more about our outsourced invoicing services, or if you would like to know more about our other virtual business assistant services feel free to call us on 0800 994 9016 or click here to request a free consultation.