You need billing to be fast and accurate. Because the sooner invoices go out the door, the sooner you get paid. These 9 suggestions could make your billing better.
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:
7. Should you accept online payments?
You can get your money up to 35% 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.
Learn more about how to handle unpaid invoices.
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.