Invoicing is a necessary part of running a business and if you don’t keep up with it, you are losing cash. Without having a proper invoice system, those client bills can pile up, setting you back in time as well as money. Whatever the reason -- not enough accountability, not enough employees -- you just can’t seem to get your invoicing tasks accomplished.
But it doesn’t have to be that way. There are a few simple ways you can reduce the struggle you may have with billing your clients. And don’t you want to make it more simple? That will mean more money flowing in more consistently, enabling your business to grow. Here are a few tips you can use to simplify your invoicing procedures and make sure your company gets paid on time.
Set Up a Proper Chain
All too often, invoicing becomes the task of several people spread out over different departments. An invoice gets passed along to someone, where it gets set down on a desk and is soon buried in other paperwork, missing in action until someone remembers that it should’ve been paid weeks ago. This is not only poor management, it deprives the company of cash it should’ve already had.
The problem arises because traditional invoices are paper based. This is fine, but you need to make sure that there is a chain of command when it comes to filing and sending invoices. There may be no accountability with paper-based invoicing because it gets passed around so frequently. Make it a rule that only a small team of people can touch the invoices, the fewer the better. Of course, the larger your company, the more people you may need, but try to keep all invoicing duties relegated to a small group.
Invoice on a Consistent Schedule
Decide on a time frame for sending out invoices and stick with it. If you tell your clients to expect an invoice a week after delivery or purchase, then send the invoice out within seven days. Consistency is the key to good investing habits.
The reason for this is that your employees and your clients will both come to understand the proper invoicing terms and act accordingly. By billing on the same month, or within a certain time period, your employees in the invoicing department will be able to keep track of who they need to invoice and when. On the other hand, your clients will come to expect a bill from you on the same days or within the same timeframe, giving them a chance to make sure they have the funds to pay you, making the entire invoice process a little easier.
Hunt Down Late Payments
Along with bad invoicing from your company, the worst thing for your cash flow is allowing late invoices to remain outstanding. This is money that you should already have in the coffers, so you should make it a top priority to go after any outstanding bills.
Of course, you still want to be professional -- they are clients, after all. But sending a reminder a few days after the deadline or a strongly-worded letter weeks later will usually cajole the clients into paying. If you get a response, that’s a good sign: even if they don’t pay you yet, they probably will soon. If they ignore your further inquiries into payment, then you may have to take more drastic measures, like adding a late fee onto their bill or, if the bill is for a large sum, threatening legal action.
With today’s technology, there’s really no excuse not to have an automated invoicing system in place to help you. Companies like DataServ.com are designed for taking you invoicing problems and making them easier for everyone.
Invoicing software allows you to set up payment schedules, track late payments and even automatically send out invoices. With just a click of the mouse, you can see the entire invoice structure for your company, so you can quickly spot any problems and take the necessary actions.
Automating your invoice management also buys you time. Now, you can use your employees for more important tasks -- like selling your products and finding new customers -- rather than billing. This is invaluable for any company looking to grow. Most software is fully customizable as well, so you can fine tune any details you want to create the perfect invoicing system for your company.
If you’re having trouble with your invoicing, try these simple steps.
Ben Yates writes about HR topics to help business owners improve and adapt. His articles can be read on a range of business blogs.