Invoicing is key for any company but for small businesses, getting paid on time is essential if you want to keep afloat. Failing to do the job properly can have dire consequences, so we’ve put together our top invoicing tips to help you keep on track.
Set out clear terms
It’s up to you to decide when you want to be paid – whether it be within 30 days, two weeks, or even on receipt of invoice. Whatever you decide, make it clear at the start of the contract and ensure that each invoice includes a due date so your client has no excuse to miss the payment. You should also set out exactly how you want to be paid, whether it be a credit card, online or cheque, as well as including information on any late payment penalties that could be incurred. For more information on exactly what you should be including, check out the Government guide which sets out their key invoicing tips.
Timing is key
One of the most important invoicing tips is to make sure you send them out as soon as the work is complete – the sooner a client gets your invoice, the quicker they can pay you. To speed up the process, use templates and send invoices electronically rather than in the post.
Late payment penalties
Introducing late payment fees won’t win you any popularity contests, but letting clients know they will have to pay extra should they miss the deadline can act as a great deterrent. Make sure you set out the terms, such as how much the fee will be, at the beginning of the contract and don’t be afraid to use it – although most businesses do give some leeway before introducing the charge.
Keep things simple
Your clients will want to know exactly what they are spending their money on, so make sure your invoice is written in a way that they will understand. Avoid any jargon or complicated terminology – if they are confused they are more likely to call you to quibble the amount or put off giving you the money until they are sure they’ve got what they paid for.
Choose your contacts wisely
One of our top invoicing tips is to make sure you know precisely who to send your paperwork to. Sending an invoice to the person you’ve been dealing with about the work – or just to a company address – can often lead to late payments, so make sure you have the right contact or department at the beginning of the contract. It’s also important to get email and phone details so you can chase up if a payment is late.
Record your work
While you may not need to include a detailed list of all the work you’ve done on the invoice, it’s important to keep track of exactly what you are charging for in case of any disputes. However, some clients may expect you to use the invoice to outline all of the work you’ve carried out, making keeping clear records even more vital.
It’s never been easier to invoice thanks to the software now available online. There are plenty of invoicing tips and tools out there which can do a lot of the work for you, including chasing late payments, which means you can get on with your real work. Do some research and check out which package will suit your business best.
Keep on track
You might be great at sending invoices out quickly but if you don’t keep a record of what you’ve sent, your clients might be paying you late without you even realising. Make sure you give your invoices a reference number which your clients should quote when paying, as this will help you track exactly what is coming in – and what you need to chase down.
Ask for help
Keeping on top of invoices is central to any business – get behind and things can quickly spiral out of control. However, if you don’t feel like you can dedicate yourself to the task, one of the best time-saving invoicing tips is hiring an accountant to assist you. Having someone who can ensure invoices are being sent out efficiently and chase clients who are missing payments can really make a big difference to your business.
Top invoicing tips for small businesses: a summary
Invoicing can initially seem daunting for any small business but an effective system is crucial if you want to be paid on time and keep your company running smoothly. By following our top invoicing tips such as setting out clear payment terms and keeping on top of late payments, you’ll be able to focus on the day-to-day running of your business and build a great foundation for future success.