Invoicing is always an issue for a business. It doesn't matter whether you are a large or a small business, it really makes no difference when it comes to deciding on when to send your invoices to your clients. Should you send your invoice ahead of time, during the works, after the work is completed and if so how long should you wait? These are questions which are asked over and over again and despite many ‘think tanks’ addressing the issue, there really is no definitive approach and certainly no single solution that would satisfy each case. The objective of any business is to get paid on time.
The truth is that you should send an invoice at a time which suits you and the particular client and that means entering into communication with them and asking questions of what suits their particular circumstances. Any business deal that you enter into should be of benefit to both yourself and your client and so one in which both parties understand the expectations of both the delivery of the service and payment expectations is always good.
There is a benefit to deciding on the terms of your invoicing ahead of time and the greatest of all the benefits is the relief that it can provide. It is always stressful to have to wonder when you are going to be paid but if you have your terms and conditions set out clearly ahead of time, there can be no misunderstanding, it becomes a system then that everyone benefits from and can understand the expectations of the agreement.
Decisions of course have to be made if you are providing a service. If your service involves purchasing materials or another service, it may be necessary to ask your client to provide you with some money ahead of time and that should be a part of the agreement that you have with your client. Again, that expectation has to be clearly communicated ahead of time or it can lead to resentment and misunderstandings when money is requested.
In summary, deciding on your invoicing ahead of time
- Alleviates any confusion between you and your client.
- Builds better business relationships as everyone is clear about the payment terms and conditions.
- Saves you worrying about when invoices are likely to be settled.
- Allows you to send reminders with a clear conscience.
- Helps the cash flow into your own business.
- Allows for forward planning.
- Makes for a happier work team as they are not likely to be receiving complaints due to the misunderstanding that unclear payment terms can cause.
- Allows you to make calculations and charge what is necessary and when it is necessary to improve cash flow within your organisation.
- It lets you get to know your client and how their business operates and it allows you to work with them to achieve a solution of mutual benefit.
- It gives you the best possible chance of being paid on time.