Top 7 Tips For Invoicing Customers

Invoicing Tips

Invoicing customers is one of the most basic steps in any business transaction. However, small and new businesses often run into obstacles when it comes to getting customer to pay on time, and in turn feel a strain on their cash flow while waiting for the revenue they are owed. Fortunately, there are some guidelines to follow in order to expedite the whole process and get money into our business in a timely and efficient manner.

Invoice As Soon as Possible

This almost needs no explanation. As soon as work is completed, send an invoice to your customer. In order to ensure that things do not “get lost,” consider invoicing by email as well as sending out a hard copy.

Penalties

To ensure prompt and timely payments from your customers, it can be a good idea to charge penalties on late payments. This has proven effective in getting customers to pay on or ahead of the due date on the invoice.

Rewards

Some businesses have begun offering a small percentage off of the total invoice for customers making early payments. This practice gets payments faster, and the discount acts as an incentive to get returning business from customers.

Tracking

Once a business starts to receive multiple sales, it is important to have a system by which customer payments can be tracked. This way, the accounting department can stay on top of the customers who have already been invoiced, the ones who have paid in full, and the jobs that are still awaiting payments. It also prevents rookie mistakes such as double invoicing customers.

Deposits

Depending on the type of business you have, it might not be out of the question to require a deposit from your customers before work has started, followed by payment midway through a project, and then invoicing for the remainder once the order is completed. By having the customer pay a deposit, they have a financial stake in the order, and are more likely to pay the rest of the invoice quickly.

Go Digital

Mailing out paper invoices has become a formality for record keeping, while the majority of transactions are performed electronically. By accepting electronic payments, money can change hands quickly, records for both our business and your customers are updated automatically, and it reduces errors and things getting lost in the mail.

Be Clear About Your Invoicing Policies

Either before a sale is made, or printed on the invoice once it is generated, your payment policies should be made clear to all of your customers. This includes what form of payments are accepted, if there are any penalties for late payment, and how long customers have to pay the invoice in full.

By following these guidelines, invoicing should go smoothly and our will be able to manage your revenue and cash flow a lot more easily.

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