13 September 2018
Making your invoices pay
If you're running a small business, invoicing and then chasing for payment can be, at best, a minor irritant or, at worst, lead you to take your eye off the ball when it comes to growing your company.
Timely invoices are the lifeblood of your business and their importance shouldn't be underestimated. When you're starting out and only have a few invoices to track each month, it's a pretty straightforward job to keep on top of everything. But, as your business grows, keeping track of the status of your invoices can quickly take over and, if you're not well-prepared, adversely affect your cashflow.
Whichever way you do your invoicing – whether it’s manually, in spreadsheets, or using online invoicing software such as Xero – these tips will help.
Provide written quotes for the customer to accept
Avoid miscommunication and misunderstanding by providing quotes in writing for your customer to accept before you start work. These can be referenced on your invoice.
Communicate by phone first time round
The first time you send someone an invoice, pick up the phone and talk to the customer accounts administrator to check everything is in order. This will help to prevent any issues or delays with payment.
Use invoice templates
Save yourself rework and ensure you don’t miss anything when you’re writing up an invoice by using templates. If you have regular clients, online accounting software gives you the option to set up automatic recurring invoices which you can review and amend prior to issuing.
Invoice as soon as a job is complete
Don’t wait until the end of the month to send all your invoices. Invoice the moment a job is complete, or failing that, daily or weekly. Decide when and how often you’ll invoice and stick to it. This will keep a regular flow of cash into your business.
Set payment terms that suit you
You don’t have to wait 30 days for payment; a seven or 14 day term is reasonable. But be aware that often big companies will pay on their terms, not yours.
Offer customers a choice of how they pay
Payment services like Stripe and Paypal make it easy to get paid promptly online. Always clearly state bank account details for BACS transfers and make it clear whether or not you accept cheques.
Follow up unpaid invoices promptly
Plan when you’ll chase overdue invoices and make doing it a priority. Alternatively set up automated reminders, so you don’t have to remember when invoices are due, Xero can do this for you.
Train more than one person in invoicing
If there are a few staff members trained to do invoicing tasks the flow of incoming cash won’t come to a temporary stop if someone is off. Set up several team members to be authorised to issue and chase invoices or take payments.
For more details and tips on invoicing, download Xero’s Invoicing Survival Guide.
Want to make your invoices pay?
At RWB, our Xero certified team can show you how you can automate your invoicing, saving you valuable time and help you get paid faster. We're a Xero Platinum Partner and have grown to become the largest independent Xero Platinum Champion in Nottinghamshire, so can offer in-depth advice to help you plan your online invoicing and moving your business to online accounting. Contact us on 0115 964 8860 or email email@example.com to find out how we can help your business.
The views provided in this article are for general information purposes only. Nothing in this article represents advice of any nature whatsoever. Accordingly, RWB CA Limited does not accept any liability or responsibility for the information contained in this article or any decision or other action that may be taken in reliance upon the information contained within it. RWB CA Limited accepts no responsibility for any errors of fact or opinion and assumes no obligation to provide you with any changes to its assumptions.