6 Powerful Ways to Improve Your Small Business Invoicing Process

 

How long can your business operate effectively when the cash flow suffers because of invoicing issues? Whether small, medium or large, the answer for every business is probably the same: not very long.

When the discussion turns to talk about what you need for effective customer invoicing, your requests are very similar to many businesses.

• The ability to efficiently and effectively process payments

• Backup processing so billing continues during outages or natural disasters

• Consistent invoice formatting

• A system that accepts multiple users

Likewise, these requests are birthed from similar issues such as:

• Failure to get customer’s new address after a move

• Missing bills either because of snail mail or an ineffective electronic process

These desires and issues are resolved through the use of an invoice software system that adds value to your business. The right one becomes a cost-saving investment when your financial sheet has a plush cash flow balance.

Automation! Automation! Automation!

For most companies, the logical first step towards an improved customer billing process is to make full use of an automated system. The aim for employing an automated process is to increase efficiency. That alone can help to add more to your bottom line.

The idea of an automated process is not new; many organizations strive toward this scenario. Key strategies, coupled with affordable invoice software, broadens the options for organizations of every size.

As you ponder implementing this type of software, consider these six power-packed ways to improve the process. These help to ensure you have a system where customers not only receive their bills, but they pay more often than not.

1. Use an Invoice Tracking System

Keeping track of paid and outstanding customer charges are an important part of your financial records. Such recordkeeping includes details about when you sent an invoice, where it was sent and how much is due.

A customer number system is also essential to accurate records. The system you employ should also include due dates. Whether you require payment upon receipt or you give customers 15 to 30 days to pay, you and customers will know when payments are due.

2. Set Clear Payment Terms

The purpose of establishing billing terms is for more than simply getting paid. Your company will also benefit by:

• Maintaining good customer relations

• Avoiding surprises

• Increasing chances that you will get paid in a timely manner

You could arbitrarily assign payment terms. You could also consider how and when customers typically pay. Is it by the 15th of the month? Do a majority wait until the 1st, or, do they follow what you have written on the bill?

Decide what consequences, if any, will apply if customers miss the payment deadline. Outline your expectations with new before entering into a contractual agreement. Remind existing customers and make sure you stick with the chosen consequences. The only way to keep your cash flow in good health is to get paid for the work that you deliver.

3. Use an Online Invoicing Method

It is never too late to put your best company face forward with professional forms. This includes the bill you send to customers. A good software program should include an option to create professional forms.

With the use of templates, simply add your company logo and contact information. Send either digitally, through the mail or both. This may largely depend on how a customer wishes to receive their bills. You might have some who still prefer to receive paper documents.

However, sending bills through an online method is effective, convenient and less expensive than printing and paying postage. While your desire might be to have a completely paperless environment, be prepared to accommodate customers who have yet to make the same transition.

4. Accept Credit Card Payments

Another improvement to consider, if you don’t already, is to accept credit card payments. This will get rid of the chase for checks and going to the bank. Online payments will get money into your business much faster.

Accepting credit cards is just one more step towards cost-savings for your company. There are many invoice software options that offer this type of flexibility in getting paid.

5. Send Payment Reminders

Putting your business on autopilot as much – or as little – as you want all depends on what you really want to accomplish. An efficient payment system that relieves many mundane tasks of billing customers and following up will help overall operations.

You want a software system that allows you to send payment reminders and also schedule late fees to hit on specific dates. You never waste time creating the same bill for the same client. Even for customers who have a hard time remembering when to pay, you can avoid those awkward conversations with an automatic, customizable payment reminder.

Some customers will appreciate a reminder; others will be more incentivized to pay on time when they know a late fee is automatically added after a certain date.

6. Get Upfront Deposits

You can also improve how and when customers pay by requesting a percentage of the entire bill upfront. Typically, a customer will pay the balance after spending some money in advance. Besides, that is less money you have to collect so you have enough revenue to pay your own bills.

Due Diligence Pays Off, Too

There are many programs on the market designed to help a variety of industries improve their customer billing processes. You want to evaluate different systems before settling on one that might not be the best fit for your company.

Performing your due diligence will help you choose the best solution that drives your company forward. Some powerful features of online systems to consider include:

• Notification when customers view an electronic bill

• Customized due dates for new, existing and long-time customers

• Apply customer discounts and incentives

• Select preferred currency for overseas customers

• Automatically calculate taxes

• Quickly email billing statements

Taking a thoughtful and comprehensive approach towards improving how you get paid for the services you deliver can reveal meaningful cost-cutting solutions. Your company will become more efficient when less time is spent on collecting money and more time is devoted to using a healthy cash flow to grow.