Are you a business owner?
Then, you would be well aware of the struggles and importance of dealing with invoices.
Well, money being the cornerstone of a business, you would definitely not want to mess it up.
Though invoicing is not something that provides excitement or stimulation to a business, it is a crucial element that keeps the cash flowing steadily. The process doesn’t end at merely sending invoices to customers; taking follow-up is also inherent.
When it comes to invoicing, everyone might commit mistakes, and this can lead to lost revenue or even worse results. So, it is vital to understand what mistakes businesses are likely committing and how you can avoid them. Here’s a comprehensive list of common invoicing mistakes and the solutions to ensure you never repeat them.
Common Invoicing Mistakes & Ways to Avoid Them
1. Sending Invoices to Clients inconsistently
Many times, it happens that you send the invoices to your clients or customers inconsistently, i.e., you either make delays in sending or send them on a different date every month. This mistake is likely to occur because monthly dates fall on different days of the week. Some choose particular days of the week to send invoices, let’s say, Wednesday morning or Friday afternoon.
This can be an issue for you and your clients as well. Your clients will have no idea as to when to expect the invoice. Thus, it can result in delayed payments. So, what can you do? Select a particular period every month on your calendar to send invoices. You can also automate this process with invoicing software. Hence, your clients will be well aware and have enough time to arrange the payment.
2. Failing to chase the debtors
Simply sending invoices doesn’t complete your job. It is essential to take follow-ups from clients who haven’t made the payment. If you fail to do this, it might hinder your growing ability. Therefore, stay organized.
Once you send invoices, set a reminder in your calendar so that you can chase up debts timely. So when the time comes, you can shoot an effective email that urges your client to take action immediately. Moreover, you can make the most of accounting software that helps you manage and track the status of your payment.
3. Providing unclear terms of payment
At first, you must clearly specify your Terms and Conditions regarding the payment process. This should include the scenarios for late fees, pricing, and other details about your products and services. You must state all these policies on your invoice so that a client can clear up any confusion regarding the payments and helps you get paid faster.
Unclear terms of payment may result in delayed payments and thus hinder the payment process. For example, stating that “kindly make the payment within 15 days” may create confusion like does it exclude weekend days or not. Instead, specifying “kindly make the payment within 15 business days” will have no perplexity.
4. Lack of using company branding
Company branding is an invoice element that is prioritized low, even though it can create a great impact. Undoubtedly, branding is crucial for every facet of your business, and invoicing is not an exception. Including branding on your invoices means your clients can easily make out who you are and what the invoice is for.
Moreover, using your company’s logo and clear branding on your invoice ensures that the clients will spot your invoices even from the pile. Thus, there are chances that they won’t pass them over and pay you on time. Besides, a branded invoice can help you improve your recognition in the market. You can leverage the benefits of invoicing software like Orderhive that enables you to create custom invoice templates and add branding elements on it.
5. Not backing up invoices
As backing up content and data for your website is necessary, backing up invoices is also vital. You’ll be legally obliged to keep them on file for a specified period. Furthermore, providing client invoice archive upon request demonstrates that you are managing their account properly.
So, every invoice you send should be backed up either as a physical copy or a digital one. Though keeping a paper copy is not highly recommended as it is prone to be misplaced or damaged, you can have one for a certain period. However, you can easily back up invoices on cloud storage or using online invoicing software.
Invoicing is pivotal for doing business, and ensuring your invoicing process is watertight is of utmost importance.
In this article, we have covered some of the most common invoicing mistakes and how they can hamper your ability to get paid. So, make sure you or your team take the time to create error-free invoices. Take this as an opportunity to showcase your professionalism and steer clear of these invoicing mistakes.
Article contributed by Kiran Bajpai, SoftwareSuggest