Improving your invoicing process and maintaining good discipline here is great way to achieve marginal gains and in some instances big value.
We feel sure that you are all over this, but as a brief reminder, here are our top tips for improving your invoicing process and profits
1) Raise and issue your invoice at the earliest possible opportunity. The sooner you send out your invoice the sooner it will get paid, particularly if you offer credit terms and have a few slow-payers. Some customers operate cut off dates, you don’t want to miss it, so get that invoice out. Also if you wait a month before invoicing you could forget to invoice altogether.
2) Send your invoices out by e-mail. This saves on postage and stationary costs; you can request “delivery” and “read” receipts from your customer so you know they have received it. It also avoid the “it must have got lost in the post” old chestnut.
3) Avoid stock piling a big batch of invoices to process on a weekly or monthly basis, if you don’t like the invoicing process or find it a bit dull a big batch can make the exercise even more loathsome. It’s much better to invoice in real time and spread the burden out, that way you keep on top of it and it’s less of a chore.
4) Make sure your invoice is complete, if a customer requires a specific order number, or reference number make sure it’s included. Incomplete invoices afford some customers a great opportunity to delay your payment, make sure you don’t provide that opening.
5) Pre-invoice practice; make sure you issue explicit terms and conditions before you start the job/order/service. So contracts, sales orders, chargeable rates etc. clear terms avoid confusion later on and reduce disputes. Again unclear terms provide customers an opportunity to query an invoice and delay payment.
6) Additional charges, if you need to bill for extras that a customer is not expecting, pre-empt the invoice and agree additional items in advance. Customers hate getting invoices out of the blue.
7) Use IT functionality: where ever possible try to automate your invoicing process, perhaps by using a despatch process to trigger the invoice or by setting up recurring profiles for repeat billing. Effective use of IT can also avoid duplication and save time.
If you already apply all of these invoicing disciplines, well done, keep up the good work!
Baillie accountants are dedicated to helping client businesses grow and achieve their objectives, to find out how we can help you please contact us.