Every small business owner wants to ensure that invoicing is done right in order to be paid faster. For a small business to run smoothly and grow, it needs proper cash flow. The lifeblood of any business is cash flow. It’s for this reason that some businesses go for an invoice cash advance when faced with late payments.
In an ideal world, small businesses would collect on all unpaid invoices once they send them to customers or clients. However, this is not always what happens in the real world. In fact, getting invoices cleared by some clients or customers can become a running battle. Nevertheless, there are cases where payments are delayed because of invoicing mistakes made by small businesses. To ensure that you’re invoicing your clients or customers correctly and not inadvertently causing cash flow issues for yourself, follow this invoice advice for small businesses.
Use the Right Invoice Type
One invoice template may not suit all the clients or customers of your business. However, using the same invoice template can improve invoice management if you deliver the same product or service. If you work on different projects for which clients have to pay, get different invoice templates. Some of the major invoice types to consider include:
With an interim invoice, customers or clients make recurring payments in small amounts. The series of payments can be monthly or upon the completion of each project. But, if you use an interim invoice, send the final invoice once you complete the project. This should detail the completed work and what the client or customer has paid for.
Recurring invoices are ideal for on-going projects where clients are required to make recurring payments. The intervals of sending recurring invoices should be agreed on. In most cases, recurring invoices are sent monthly or weekly. Essentially, you should agree on the schedule for sending invoices with your client or customer to ensure proper workflow and payment.
A final invoice is sent once the project has been completed. It outlines the completed work and the interim invoices which have already been sent. It also states whether the client or customer has cleared interim invoices and the outstanding final amount.
Using the right invoice type regularly makes securing an invoice cash advance easier if you should need one. That’s because you can easily show the lender your ability to repay the borrowed amount within the agreed time.
Adapt Online Invoice Management
To ease invoice processing for your clients or customers while streamlining invoice management for your business and reducing headaches, embrace online invoice management. This eliminates the need for paper invoices. Piling up of paper invoices is a headache for both clients and small businesses. In fact, losing track of what has been sent and what has been paid is easy when you stick to paper invoices.
Online invoicing and billing software streamlines invoice management for the involved parties. The software enables you to send invoices, check their status, and even send reminders for unpaid invoices. What’s more, online invoice management platforms enable small businesses to send invoices from devices like smartphones anytime. This enhances convenience, efficiency, and effectiveness in invoice management.
A sure way to ensure that your invoices are cleared in a timely manner is to avoid delays when invoicing clients or customers. Basically, you should send invoices for the delivered products or services immediately. If not, talk to your client about a payment schedule. Nevertheless, it’s still possible to have payments delayed even when you invoice clients or customers on time.
Some of the factors which can occasion delayed payment even when you have an agreed upon payment schedule include:
Invoicing the Wrong Person
The primary contact or project manager may not be the same person in charge of accounting. Therefore, before dealing with a long back and forth exchange, which can delay payment further, check this with the intended recipient of your invoice.
If you are not clear about the terms of payment in the invoice, the client can delay clearing the amount they owe your business. For instance, you may expect the client to pay at the end of the month while the client may think all payments will be made once the project has been completed. To avoid unclear terms which can lead to a frustrating and an uncomfortable situation, agree on payment terms with your clients or customers and sign a written agreement.
If you send an invoice on a Sunday, it’s unlikely that your client will clear it the same day. However, if you invoice your client on a day like Thursday, it’s highly possible that they will pay before the end of the working week. To avoid inconvenient invoicing which can occasion delays, settle on a payment schedule with your clients or customers.
Small businesses can use online platforms which automate invoicing. These platforms require small businesses to choose specifics and pick invoicing templates which suit them. Automated invoicing makes getting an invoice cash advance easier because a small business can show the lender how often invoices are sent and paid.
What’s more, invoice automation ensures that relevant information is preserved online to make invoicing anytime and from any location easier. It’s also possible to set up a recurring invoicing schedule with an automated system thereby saving energy and time.
It’s normal for clients or customers to delay payments some times and for sometimes legitimate reasons. This is part of any business. When a client has an overdue payment, don’t be rude when following up or just hope they will pay when it’s convenient for them. Instead, follow up politely and professionally. Don’t forget that you need repeat business from your clients or customers. Therefore, be assertive but polite.
Running a small business is a time-consuming task. However, your efforts will go to waste if your small business makes a loss as a result of unpaid invoices. To avoid this, streamline your invoicing process. Follow these tips to send invoices in a way that enables you to collect your business money. Additionally, use a platform which archives invoices to make securing invoice cash advances easier just in case your small business faces cash flow issues.