Your invoicing process is foundational to the rest of your business. Yet too many businesses find themselves sidelined by unpaid bills or stacks of paperwork. Without a steady revenue stream, your other core processes could come to a grinding halt — even your payroll.
That’s why it’s vital for small business owners to maintain an efficient process for invoicing and billing. Let’s take a look at how to improve your invoicing process and see how you can use these tips to keep your company running smoothly.
What Makes a Successful Invoice Process?
Every invoicing system depends on two critical elements: accuracy and speed. Errors and delays in payment can cripple your business like nothing else can. Let’s take a closer look at these two elements and how they influence your invoicing process.
Accuracy Is Crucial
Always remember the fundamental purpose of an invoice. They are sent to clients to request payment for the goods or services you’ve provided. Therefore, the final invoice needs to be as accurate as possible and record all of the details necessary to get paid on time and in full.
This means that your invoices need to contain information that includes:
- Your company information
- Your client’s information
- Description of goods or services
- Total amount due
- Payment terms
- Payment deadline
Naturally, this means avoiding errors in the description of your services or the price of your merchandise. But it also means presenting clear payment terms and communicating important pieces of data such as due dates and any late penalties attached.
Ensuring the accuracy of this information is the first step to optimizing your billing process.
Speedy Invoicing Helps Get You Paid Sooner
Speed is always of the essence. The faster you get paid, the sooner you’ll have access to cash flow for other projects or products. Invoicing right after services are rendered or products are delivered increases the odds that your satisfied customers will pay for your services, creating a smooth, efficient billing process.
This also means that accuracy can influence the speed at which your invoices are sent. Having access to accurate, up-to-date data allows you to communicate with your clients in a timely manner.
Otherwise, your invoices could be delayed until expense reports are updated or other information is collected.
How Can You Improve Your Invoicing Process?
Improving your invoicing process will demand that you keep speed and accuracy as your two highest priorities. You can accomplish this in several ways:
Use Professional, Well-Formatted Invoices
First, your invoice should be a reflection of your company. It should include your logo, your business information, and any other details necessary to highlight the unique features of your business.
A professional invoice can give your business an added layer of legitimacy, which may encourage your clients to pay quickly for their services.
At the same time, you’ll want to keep your invoices clean, clear, and well-organized. A well-formatted invoice should be self-explanatory and easy to navigate, leaving no room for confusion.
In fact, some companies put the word “invoice” in bold at the top of each document to leave no room for interpretation.
Include Important Details to Limit Client Confusion
A well-formatted invoice should include all relevant details to minimize any confusion about the services rendered or the payment process.
Specifically, this means that your invoice should clearly delineate the products purchased or services rendered. Make sure each item can easily be matched to a specific product or service and include the price of each.
Additionally, your invoices should also include details about the payment process, like what types of payment you accept, payment deadlines, and any charges for late fees.
Not every business will assess late penalties, of course, but you should always be clear about deadlines and payment terms so that customers understand what to expect.
Outsource Your Invoicing Process
Of course, one of the simplest ways to optimize your invoicing process is to let the professionals handle it.
Many online bookkeeping companies can also double as your billing department. Outsourcing your invoicing process to a financial team allows you to focus on your core business processes, confident that your invoices are optimized for your small business.
Visory is more than just a virtual bookkeeping service. While we pride ourselves in providing bookkeeping for professional services, we can also handle your business’’s invoicing process so you get paid faster than ever before. Learn how Visory’s accounts receivable services can help you stay on top of outstanding invoices.
Send Automatic Follow-Ups with Reminders and Late Notices
As every small business owner knows, outstanding and unpaid invoices can slow your revenue stream and deprive you of access to cash. Some businesses even make a habit of ignoring initial invoices, choosing to prioritize other bills instead of smaller invoices. Whatever the reason, you’ll want an invoicing solution that helps you get paid faster.
Modern invoicing systems can send automatic follow-up messages to your clients, prompting them to respond to your invoice. Many clients may actually appreciate an electronic reminder and send payment the instant they receive it. This saves you from having to send second notices or make follow-up phone calls.
You can also send late notices, which may also include notification of any late charges assessed on any outstanding bills. These reminders prompt customers to pay their debts, all while providing a record of your attempts to collect the debt.
Billing Software Can Help Speed Up Your Invoicing Process
Perhaps most importantly, billing software can speed up your invoicing process. Integrating your software platforms can help you quickly convert estimates into invoices or record billable hours that can later be sent to your clients as a finalized invoice.
Billing software can even be used to create and send professional-looking invoices. You can save these documents as a template for future use, making it easy to reuse again and again.
Finally, modern software systems allow you to manage multiple processes at once, helping you integrate your invoicing process with other core functions such as inventory management, accounting, and more.
Together, these solutions can provide your business the accuracy and speed you need to create and send invoices with ease and efficiency.