If you’re running a small- to mid-sized business, you’ll likely struggle with convoluted, inefficient processes. You’ll put them together with the best way your know-how, and they may work fine in the short-term, but eventually, the cracks are going to start to show.
You can’t afford to take this approach with invoicing. Rather than putting together and sending invoices ad hoc, you need a consistent streamlined system to invoice your customers—or else your cash flow and business finances overall are going to suffer. Fortunately, it’s easy to put together a streamlined invoicing system once you decide to do it.
Streamlining Your Invoicing
These are some of the most essential strategies for getting a better-invoicing strategy in place:
- Start sending invoices online. If you aren’t already, start sending your invoices online. Submitting invoices digitally, rather than through physical mail is going to save you time and money, and be more convenient for your customers at the same time. To do this, you’ll likely need to rely on an online invoice platform or invest in the right software.
- Find the right software or platform. You may have been able to get away with manually creating invoices with the help of a program like Microsoft Word or Excel, but if you want your invoicing strategy to be scalable, you’ll need a solid platform in place specifically for creating and submitting invoices. There are many options to choose from, so make sure you experiment with several options and choose the one that best fits your business in terms of functionality, usability, and price.
- Set standards for numbering and formatting. All invoices should follow some basics when it comes to formatting, but yours don’t have to be exactly the same as everyone else’s—as long as your formatting is consistent. For example, you should have a numbering format that allows you to count your invoices sequentially. You should include your company’s name and contact information somewhere on the invoice. But your placement and formatting specifics may vary from another business’s, so long as they stay the same from invoice to invoice.
- Have a system to set terms. You can set different terms of payment for different customers, but you’ll need to consider how you want to do this. Most businesses use something like net-15 or net-30 days terms, requesting payment within 15 or 30 days, respectively. You may also want to perform a credit check on customers before taking them on, setting stricter terms or asking for payment upfront for customers with an inconsistent past.
- Have a system to follow up on unpaid invoices. Sometimes, customers will fail to pay an invoice—and not for any malicious reason. If and when this happens, it’s important for you to follow up, or else your cash flow will suffer, and you may lose the invoice in the shuffle. Occasionally, multiple follow-ups may be required. You’ll need a consistent system to know how and when to execute this.
- Document your standards. You may intuitively know what your invoicing standards are, and you might train your employees on those standards, but it’s still important to formally document your procedures. Your documentation will serve as a consistent anchor point, to which your employees will be able to refer if they’re ever lost or confused in the future. This will also prevent different employees from diverging in their practices in the future, and make it easier to train future candidates.
The Benefits Of Better Invoicing
Once you master the art of invoicing your customers, you’ll enjoy several benefits, including:
- Better cash flow. For starters, more consistent sent invoices will lead to better cash flow for your business. Cash flow can make or break your business, and mastering it early can ensure your business has all the money it needs to operate successfully.
- Customer satisfaction. Your customers being invoiced will be more satisfied if they can receive, review, and pay their invoices in a way that’s both convenient and simple.
- You can’t scale your business upward if your invoicing strategy is improvised or inconsistent. However, if you’re relying on a nearly-automated and consistent system, you’ll be able to grow your business more efficiently, attracting and accommodating more clients while expanding your geographic reach.
- Internal documentation. A nice side effect of using a platform consistently is that you’ll have searchable, easily reviewable internal records. If you’re ever audited, or if you ever need to refer back to previous invoices, you can do it.
Adjusting and improving your invoicing practices may be challenging, and it may cost both time and money, but it will be worth it if you can master this branch of your finances. Your customers will be happier, you’ll cash flow will be improved, and you’ll have more options for the future of your business.
If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.