How to Get Paid Faster With a Better Invoicing Process
by Caron_Beesley, Community Moderator
- Created: October 15, 2012, 7:12 am
Tired of chasing down one too many unpaid invoices?
Death and taxes may be two of life’s certainties, but if you are a business owner, then in all likelihood you can go ahead and add delinquent receivables to the list.
Unfortunately for small business owners, the wait to get paid is only getting longer. According to a 2012 Wall Street Journal survey, 64 percent of small businesses had unpaid invoices more than 60 days old while 20 percent say the problem is worsening.
The trickledown effect of unpaid invoices is particularly taxing to small business owners – impacting hiring, investments in business and product development and your ability to pay bills.
There are a number of measures you can take to prevent and deal with non-paying clients such as agreeing on payment policies and enforcing late payment fees, but perhaps one of the less obvious tactics is to optimize your invoices for faster payments. Here’s how:
Give Clients What They Need
While your invoice should always include standard information such as your billing address, date and other necessary line items, don’t forget that some clients may require additional details. Details like a contract number, purchase order, tax ID or account number all can help expedite payments. Check with new clients before invoicing them to make sure you are giving them the details they need.
It might also be a good practice to attach your work order, statement of work, contract, or other document that outlines exactly what you agreed to provide. It’s even better if these documents are signed. This will let your client’s accounts payable team know who to contact internally to get the invoice approved and paid.
If your processes can support this, invoice as soon as the work is complete rather than waiting until the end of the month. This will help alleviate delays and ensure you have a steady stream of cash coming in throughout the month.
You may already be emailing PDF invoices to clients, but another option for reducing the mailing and processing cycle is to invoice your clients online. There are many commercially available online billing systems to consider, many of which integrate online payment options too. To help determine the right platform for your small business, read Going Beyond the Spreadsheet – Automate Your Billing Process with Online Software.
Consider Online Payment Options
Avoid mailing delays and help your client process payments with ease by offering online payment options. Amazon Payments, PayPal and Intuit all offer online payment services that can help you get paid on time. Some of these also offer easy integration with your online billing system and business finance software.
Depending on your industry, you may even be able to find trade-specific online payment services. For example, my pet sitter uses a system designed exclusively for professional pet sitters. Ask around and do your research before signing up for one of these services – and of course, check that your clients are ok with processing payments online.
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