As a local business owner, you probably spend a lot of time marketing and chasing orders. Then you spend a lot of time and energy getting the job done. So, it’s only natural, when your resources are stretched a little thin, that you might find invoicing a challenge.
When you’ve got too much to do, something has got to give, and often, collecting money from clients falls behind. Here are a few invoicing tips that will help you to streamline the process and get paid faster.
1. Make Your Payment Terms Clear
Many customers will either assume you offer 30-day payment terms or try to pay you at 30 days regardless. If you have specific payment terms and penalties for late payment, make sure your customers know what they are from day one.
2. Use Invoicing Software
Yes, you can create invoices by hand or on a spreadsheet but trying to remember what the next invoice number is, ensuring that every calculation is correct and not losing invoices is never guaranteed. Accounting software is cheap and sometimes even free – so take advantage of it!
3. Automate Invoicing
When you’re running a smaller, local business, there’s no guarantee you will have time to get all your invoicing done at the end of the month. So, use automation tools to do invoices sooner, and set them to send on the last day of them month. Or, if you invoice when you complete a job, save them as a draft, so all you have to do when the job is done is hit send.
4. Give Your Customers Payment Options
If you only accept one or two kinds of payment, you might actually lose business because of it. Many people don’t use cash or cheques at all anymore, so if you still expect people to pay using those kinds of methods, they might go somewhere else. Offering a variety of payment options like credit and debit cards, you’ll have less trouble collecting payments and your customers will be happy!
If you’re looking for more tips on receiving payments, check out these two other posts on our blog:
5. If You Say You Charge Interest, Do It
Most slow payers are habitual slow payers. If you have trouble collecting from them once, you will probably struggle again. After a while, you might get tired of chasing payments, and decide to implement an interest charge on late payments. If you do, and you let your customers know about it ahead of time, don’t be afraid to charge that interest! It costs you money to wait for payments, so it’s only fair that you pass on the cost.
6. Stay in Touch
This is good advice in general – not just when it comes to invoicing. While it’s fine to send reminders about payments to your customers, make sure you keep them in the loop during the job too. Some customers will delay payments to “pay you back” if they felt like the service they got was lacking.