Getting paid is the name of the game when it comes to the business world. Managing invoices effectively is the best way to make sure your company is accurately projecting expenses and receiving payments. Here are 5 tips on how to master managing your company’s invoices so that you are set up for success.
Automate Bill Processing
This may seem like something only bigger companies need help with but that’s just not the case, a lot of small businesses can gain a lot from automation. The manual processing of paper invoices is not only time consuming but can introduce a plethora of problems and headaches. Switch to an automated process that will eliminate the possibility of lost, untracked and unpaid invoices falling through the cracks. This will help with identifying and reducing errors, duplicate and unpaid invoices, keeping your company on track and informed.
Payment Terms Agreed Upon in Advance
Payment terms matter. You want to communicate as clearly as possible what is expected from the customer. How much is due? When is it due? How does the client know they will be billed? Customers are more likely to pay on time and in full if they know what and when their payments are expected. Make sure at the beginning of the project or relationship your costs and fees are upfront, and then make sure they are clearly identified on the invoice. This can save everyone time and energy but most importantly keep business and invoices as positive as possible.
Include Only the Right Details in your Invoices for Payment
Provide a clear, understandable description of the items you are billing for. If you can avoid sending a multi-page invoice detailing every phone call, avoid it – the easier it is to read your invoice, the faster your client will process it. Besides an easy-to-understand description of the items or services you are billing for, make sure you include invoice numbers, terms, due dates, and where to send electronic payments. These are faster than checks!
Stay on top of Unpaid Invoices
The best advice here is to always remain professional and understanding when reaching out for unpaid invoices. At the end of the day your company is in the business of making money and making sure payments are received should be a top priority. Staying on top of the unpaid invoices will ease that pain in an uncomfortable situation. An effective way to do this is with a regular cadence. For example, when approaching the due date be sure to send out a friendly reminder, wait a few days if no response and reach out with a call or email. Hopefully you are met with an immediate response. All-in-all keeping professional but persistence is the key and stay on top of these accounts using your invoices properly.
Monitor Accounts Receivable
Get a system in place that not only works but is understood by those using it and monitor it. The main goal is to keep your cash flow as positive as possible and to do so while making sure that you are sending invoices regularly, or as soon as possible after the sale. If all of that is looking good make sure to take a look at other parts of the system and see if any changes need to be made. Maybe you can add incentives for quick payments and add fees for late payments or even a possible change on the due dates. All processes are worth taking a look at to keep your business growing and thriving.