Business Invoicing

Client invoicing practiced in a clear and organised way will not only help you receive your cash sooner but will portray professionalism and provide evidence in the event of a non-payment or business insurance claim. We take a look at the top tips for best practice customer billing.

Business Invoicing

Taking on new customers

  • Can you avoid invoicing? Prevention is always better than a cure. Payment on delivery, part payment or even cash up front are all options to consider when agreeing on a job. In the long run this can be less work all round.

  • Have your price and payment conditions decided in advance – in writing. One of the main delays in payment will be from discrepancies with the service or amount. Avoid these by having everything written out and confirmed with the customer from the beginning.

  • Can they afford to pay? Have you looked into the customer and are you confident they are not a hoax? Have you checked references or previous partners?

  • Set clear terms in advance and convey them clearly. If you offer discounts on payments up to 3 weeks before due date for example, make sure your invoice states what day this term is up. Be as clear as you can from the beginning.

Sending the invoice

  • Don’t let the delay’s start with you. Deliver the invoice with the goods/service on time, or early. You set a precedent if you are late yourself so the longer you take the longer you wait.

  • Make sure all the information needed is on the original invoice. Delays and late payments can come from the back and forth caused by bad communication and sloppy invoicing. People are not in a rush to pay their bills – don’t give any excuse to delay or put off doing so.

  • Automate your processes as much as possible. Not only will automation create less administrative work but it will also mean that reminders and other tasks will not be forgotten. There are a range of applications and software programs that do a variety of jobs at an even wider variety of prices. SMEs can also consider simple and cost effective phone or tablet apps to keep track of their invoices.

business cashflow
  • Start your paper trail from early on and keep a record of:

    • Changes to the agreement

    • Deadline notices

    • Any communication with the customer regarding the specific job/invoice

    • Who the invoice was sent to

    • When it was sent

    • How much it was for

    • Payment due dates

Keeping track

  • Invoice tracking. This is another task which can be managed with computer software and is something that most businesses will already have in place. Smaller businesses or those with few invoices may still opt in to doing this manually. As well as helping you keep your paper trail the tracking system will give reminders to send an invoice or alerts when payments are overdue.

  • Sending reminders. Being organised and having your tracking system up-to-date will allow you to also schedule times to send your customer gentle reminders about upcoming deadlines. You can choose to remind before the early payment discount passes or before the final payment date as well as late payment notices.

  • Be firm. You have provided a service under the agreement that you will be paid. You should be actively pursuing late payments. That is not to say that a missed deadline was not an honest mistake so reminders should always be firm but not rude.

  • Don’t forget to pick up the phone. Emails are easy to miss or forget. Friendly phone call is often just the thing that’s needed to gently remind a busy customer that there is a bill outstanding. As always, make sure you confirm the outstanding balance and the date it will be paid.

  • Invoicing, as with most things in business is not an exact science. We have all forgotten to pay a bill or put off the task for another day during a busy week. It can be annoying to have to chase but it’s a fact that we don’t like paying out money, or at least not as much as we like receiving it! Human contact and clear negotiations will pay equal dividends to well-kept email and electronic paper trails. Master both and you should be laughing all the way to the bank…