It isn’t as easy as it should be, but that’s probably down to the ‘invoicer’, as much as it down to the ‘invoicee’.
Controversial? Maybe, but hear us out.
It’s far too easy (in our eyes) to blame other businesses or customers who are repeatedly late with payments.
After all, thousands of businesses go off the edge of a cliff each year due to unpaid and late invoices.
Why don’t they see the bigger picture? Why don’t they think of the little guy?
Well, to put it bluntly, it’s because the little guy is getting his invoicing all wrong.
As far as we see it, preparing invoices could well be one of the most important tasks you are likely to perform as a business owner.
They are the first step towards generating an income, and they obviously mean the difference between being able to pay the mortgage, and for food etc.
You need money to live, not just to keep a business alive.
The key to a harmonious business, and a happy and stress-free life as it happens, is when invoices are done correctly and professionally.
So, how can you achieve this optimum level of invoicing for your business?
You should start by checking out our ‘ins’ and ‘outs’ of invoicing…
The first ‘in’ is found with dates.
Get the dates right. This should be the first thing that customers see after the logo (or business name) and contact information.
The dates shouldn’t just refer to when the deadline for payment is, but should also make reference to the completion of the work. Dates keep people accountable and give them fewer places (or excuses) to hide behind. Dates are pretty important, so we’ll say it again, get the dates right.
Our first ‘out’ is ‘out with surprises’.
No one likes a surprise in the world of business, especially if that surprise is going to cost them money.
Make sure customers are expecting invoices ahead of time, and that they have at least a rough idea of the ball park figure.
Any changes should be explained and detailed clearly.
Another ‘in’ has to be following up on invoices and payments, promptly and professionally.
There’s nothing wrong with following up on a late or non-payment. It could be an innocent mistake, or it could be intentional avoidance. Either way, stay ahead of the game by following up with professional emails or automated reminders. Automated reminders are great, by the way, if you’re a little nervous about that sort of thing.
That said, and along the same line of thinking, we come to another ‘out’, and we have to tell you to throw out any inhibitions about sending invoices.
You know your worth by now, or you’re at least getting there, and so you should have no reason at all to feel awkward or timid about what you’re sending, especially if you’re confident in the quality of the goods or services you’re providing.
Confidence is key, and bigger businesses will always pay the timid, quieter invoices last.
Confidence, not arrogance, will serve you well.
We also say ‘in’ with clarity, as in ensuring your business name and logo are clear to the customer.
Make sure that the information is easy to understand. How it looks is important, but the information it contains is more important.
We say ‘out’ with time wasting, and ‘out’ with unnecessary delays.
Strike whilst the iron’s hot and all that. If the work is fresh in the customer’s mind, and they receive an invoice soon after, chances are they’ll pay it.
If it comes several weeks or months after completion, well, it can’t have been that urgent, can it?
That’s what we mean about it being as much the ‘invoicer’s’ responsibility to get invoicing right, as it is the ‘invoicee’s’ responsiibility to pay the damn thing.
What else makes our ‘in’ list then?
These help you keep track of how many invoices you’ve sent to a particular client.
Also, this is just plain good practice for filing your records, meaning you can track down unpaid invoices quickly and effectively.
You’re also going to be stressing a lot less when it comes to filing your tax returns. A few minutes now could save you a few hours come the next tax deadline.
Your business’s contact information should always be an ‘in’.
This helps with queries and, who knows, even more business down the line.
The recipient’s contact information should be there too, more for you than them, as should a list of the charges (in as much detail as you feel is necessary).
Again, this is more for them than it is for you, but it can help them see exactly what they’re paying for.
The ‘Total Amount Due’ is a pretty big ‘in’ to remember as well.
Make sure it is easily distinguishable from the other figures and amounts on the page.
Your preferred payment method too, that’s an ‘in’.
If you hate paying PayPal charges, remove it as an option altogether.
At this stage, you have the control, so don’t give it away.
If you follow all of our advice on the ‘ins’ and ‘outs’ of invoicing, you’ll improve your processes almost immediately.
Don’t get us wrong, you’ll still get companies who delay payments almost religiously, no matter how professional your invoice is, but we find that the best solution is in professional and consistent invoicing, and professional and consistent following up.
It’s also worth mentioning that setting the example is a good path to choose.
If you don’t like receiving late payments, but make them yourself, are you contributing to a problem that you’re becoming sick and tired of?
Maybe, but for now, just make sure you get the dates right, OK?