10 Invoicing Tips for Small Businesses
Invoicing correctly isn’t all just about what’s written on the invoice. A large part of getting it right comes down to effective communication and relationship management.
Here we run through our top 10 invoicing tips to help you not only get paid faster but also keep those customers coming back!
1. Get a contract
First things first, get a contract and get it signed. Starting off on the right foot, with everyone on the same page will go a long way towards setting the tone for the remainder of the project.
It’s in both party’s interest to get a contract signed. Without one, you’re at risk of being left in the lurch with no payment and they’re at risk of being overcharged or being left with an incomplete or inadequate end product. Now that’s no fun for anyone!
2. Be really specific
Before you provide an estimate, make sure you uncover any unknowns so that you can be as accurate as possible with your figure.
Make it really clear on your invoice what you are charging for. For a customer, it can be really frustrating receiving an invoice for which the charges are unclear.
3. If you’re out and about regularly, consider a mobile invoicing solution
Getting paid quickly is largely due to getting your invoices out quickly. If you work in the field or you’re on the road a lot, consider a mobile invoicing solution to enable you to send invoices on the go.
InvoiceASAP is a great tool that does exactly what it says on the tin. It also allows you to attach voice memos and photos to all your invoices and estimates which is great if you need to show before and after photos or proof of work.
4. Set your own payment terms
This includes your invoicing dates and due dates. Take into account that there will, inevitably, be late payers and adjust your payment terms accordingly.
Consider charging a percentage of the overall amount upfront, or setting payment milestones so that you get a steady flow of cash whilst carrying out the work.
Be clear with your customers about your payment terms. For example, you may require a signature on estimates, and include due dates in every written piece of communication with your customer.
5. Keep communication with your client open, especially if the scope of work creeps
Often you start working on a project with a client and realize, after you draw back the curtains, the full scope of the project was greater than anticipated when you initially provided your estimate.
If you think you will go over the estimated amount, make sure you communicate this clearly to your client as soon as possible.
No one likes being stung with an unexpected hike in price. So, rather than giving them a nasty surprise at the end of the project, or worse, undercharging, be completely open and explain exactly what you’re charging for and why.
It is also worth addressing scope creep in the initial contract with a client. Many clients may require a Change Order to be signed which is essentially a secondary contract listing the additional hours, work, products or services required to complete the job.
This way you will avoid leaving clients with a sour feeling at the end of a job and maintain a positive relationship with them.
6. Get a secondary contact for your invoices in case the primary contact is on vacation
There’s nothing worse than receiving an out-of-office message from a client letting you know that they’re on vacation for the next few weeks, just after you’ve emailed them an invoice.
Rather than waiting it out, make sure you have a secondary point of contact who you can call on to get the payment processed.
Also, if you can be clear on invoicing dates from the start, you should get the heads up from clients if they will be away during those dates and ask for an additional contact during those periods.
7. Invoice as soon as possible after, or as products and services are supplied
The sooner you submit your invoice, the sooner you’ll get paid.
Honor your commitments too – if you deliver on time, you’re more likely to get paid on time.
8. Broaden your payment solutions
Make it easy for customers to do business with you and they’ll be more likely to come back.
By increasing your payment options, your client will not only be happier, you’re also more likely to get paid faster.
9. Keep on top of cash flow, track which invoices have been paid and which haven’t
Always be on top of what’s been paid and what’s owed and have a timely system of reminders, monthly statements and phone follow-ups to lessen the risk of running into cash flow problems.
10. Consider using late-payment fees or prompt-payment discounts.
If late payment is a common occurrence, consider dishing out penalties to those who don’t stick to your payment terms or offering discounts to those who pay up early.
Do make sure this is included in your contract so that they are aware of the implications and so that you have something to refer back to if they take issue with paying a fee.
Finally, when it comes to getting paid on time, it may feel like the majority of control is with the client. But by taking the lead, being organized, open and clear you will have more influence over when you’ll get paid.
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