3 Tips for More Effective Invoicing
Aside from implementing more ways to accept payments, business owners can optimize their internal processes in order to make sure that they are able to effectively collect on invoices, keeping their cash flows energized and avoiding a situation where they have a large expected profit but no liquidity with which to pursue new opportunities as they present themselves.
1) Get your invoices out as quickly as possible. The more time you allow clients to pay your invoices, the better. Making sure that you are able to quickly prepare and send out invoices is in your best interest as it provides the largest amount of time for clients to pay before the deadlines you have set for collections. Getting paid early as opposed to later is always a good thing, as the more cash your business has on hand, the more mobile it will be in terms of responding to market changes, growth opportunities and equipment purchases.
2) Keep unpaid invoices organized by date issued. Making sure that your invoices are set up in a way that allows them to be associated with their date of issue at a glance will help when organizing your collections efforts. Most businesses will use staggered collection letter templates of increasing urgency based on the length of time an invoice has gone unpaid, so knowing where each account lies along this times line is an important part o staying on top of your unpaid accounts.
3) Send a confirmation of payment to your clients for their records. A receipt should come standard with your services, and it is imperative that you proved them to your clients to avoid issues with your accounting down the road. If for whatever reason your accounting processes are disturbed, going back to your clients and requesting copies of their paid statements is one way of recovering sales data in a very tight spot. Aside from this, a quick and responsive billing team makes a better impression and relays the message that clients should reciprocate in exchanges in a timely manner.
Photo Credit to Morgan on Flickr