Invoicing: a word that can make even the most thick-skinned business owner want to go hide under the bedcovers. Yet it is the lifeblood of any business, and prompt payment holds the key to continued success. If only it was a bit easier to get customers to pay on time…
The process of producing invoices, getting them out on time, and then getting your clients to pay up in a timely fashion is undeniably a challenge, but one that some businesses make unnecessarily difficult.
“The primary challenge companies face when trying to create and send invoices is distractions,” says Joy Ugi, digital marketing manager at Orderly, restaurant ordering technology. “Invoicing is usually a process that requires undivided attention, and in some environments, it’s difficult to find a distraction-free, quiet place to complete the invoicing process. Most people doing invoices have multiple responsibilities and must juggle many tasks, including invoicing.”
This multi-tasking woe is a sentiment echoed by Jeff Kear, owner of Planning Pod, online event management software: “Small businesses are run by people who wear many hats, and often those small business owners get so tied up into other operational matters that invoicing gets pushed back to focus on putting out other fires.”
Even if you’re a small business, you’ll most likely need to rely on the input of other people or departments, which can be a real headache, especially if your IT department and communication processes aren’t up to scratch.
“The process of building invoices usually involves funneling billing information through a central person or department, and that person or department is reliant on everyone else in the organization to supply them with information in a timely fashion,” explains Kear. “Sometimes businesses don’t have an efficient way of collecting this information (via timesheets, work orders, proposals, etc.) or compiling it into invoices.”
If you’re still not motivated to take some action on your invoices, think about how much time it will free up to do more enjoyable tasks. “The main benefit of invoicing faster is that you get back to what you’re passionate about doing. Whether you’re at a large company and invoicing is one of your main tasks, or you’ve started your own small business and have to do invoicing as well as seemingly a million other tasks, faster invoicing means a check off your list and more time accomplishing something else.”
And as Greg Waldorf, CEO of Invoice2go, so nicely puts it: “Invoicing is the first step to getting paid, and putting such a critical task off can hurt cash flow. When you’re focused on running your own show, invoicing moves to the bottom of the to-do list, often piling up as homework for nights and weekends. Saving time on administrative tasks means you can focus more on growing your business, or reclaiming a little time for yourself.” Now who doesn’t want a little bit more me time?
With the help of the experts, we’ve put together five tips that will transform your invoicing and get the money rolling in again.
Get invoices out on time
If you think your customers will pay up without being sent an invoice first you’re living in some kind of parallel universe. And the quicker you get that invoice out, the sooner you’ll get your payment (in theory). To do that, you need a schedule to make sure these tasks don’t get forgotten or put to the bottom of a to-do list.
“Businesses can speed up invoicing processes by first creating a strict schedule and process for when invoices are to be prepared and sent out, and nothing short of an act of God should get in the way of this schedule,” says Kear. “One single person should also “own” invoicing and have the authority to do whatever is necessary to make sure invoices are sent out on time, every time.”
Automate to ensure accuracy
Getting invoices out on time isn’t a one-person job, it involves input from many different departments, meaning that businesses need a streamlined method of collecting information so everything is ready to get that invoice out. “This can include software programs that not only automate the invoice preparation processes but also allow employees to input vital information (like timesheets, work orders, etc.) in a prompt and consistent fashion,” explains Kear.
“Creating invoices manually takes time, especially if there are a lot of them,” adds David Bakke, business expert at Money Crashers. “There’s also the possibility of increased errors and accuracy issues when you are manually inputting data for invoices.”
Set clear payment deadlines
Putting pay on delivery on an invoice just won’t cut it any more. Be clear in your deadline setting. If your customer hasn’t responded to your invoice or has missed the deadline, don’t be afraid to follow up. There are any number of reasons why your invoice hasn’t been paid, but a follow up call, email, or letter is a must to get the cash rolling in. You can also incorporate these reminders into your invoicing schedule to ensure no payments fall in between the cracks.
Provide more ways to pay
If you’re still sending out your invoices by post and only accepting cheques, you’re living in the dark ages. There are a multitude of payment methods these days, from e-payments to Paypal to credit card, and so on. The trick is to make it as easy as possible for your customers to pay up, and faster. If a customer regularly isn’t paying on time, you’ll want to consider interest fees (if you haven’t already got them in place), or refusing to do the work before you’ve received at least part payment.
“Most modern companies prefer electronic invoicing formats, as it erases the need to scan an invoice in order to put it into accounts payable,” explains Waldorf. Using an electronic format will save you time, and help you get paid faster. And, your customers will thank you for making their lives easier too.
Pick a cloud-based invoicing app
If you haven’t got yourself an invoicing (or accounting) app yet, what are you waiting for? According to our GetData study, companies are saving more than three hours per week by using an application to manage their invoices. These apps provide a plethora of useful features from online invoicing to recurring invoicing to multi-currency to automated invoice creation.
“Having an invoicing software system that lets the business build custom templates and also turn things like proposals automatically into invoices can save lots of time when preparing invoices,” says Kear.
“Companies can speed up their invoicing processes by moving to online solutions. Software can cut out the manual labor of keeping spreadsheets updated and filling out invoicing information by hand,” adds Ogi. “The small amount you’ll pay for software is worth its weight in the time you’ll save and accuracy you’ll receive when it comes to the invoice process.”
Ready to get yourself a new invoicing app? Check out our list of the top-rated billing and invoicing apps from our GetRank analysis.