Following invoicing best practices is one of the most efficient ways to achieve greater performance and productivity, with the least amount of effort. That’s because when the billing cycle runs like a Ferrari, not a horse-drawn buggy, revenues are banked faster and more reliably.
Automate to Lower Overhead
Businesses may procrastinate about transitioning from labor intensive and error-prone manual and paper invoicing to an automated e-invoice system. They’re worried that it will cost too much or require technical expertise they don’t have. But they may not realize that within recent years technology has become exponentially more sophisticated, accessible, and affordable. Nowadays businesses of all sizes can lower their invoicing costs by as much as 70 percent, simply by automating. That’s a powerful justification for switching over to a much better invoicing method.
Find the Best Solution for your business.
Choose the Right Software
There are turnkey software platforms requiring no training or IT upgrades. They can instantly shorten the revenue cycle, minimize errors, increase security, enhance customer service, and relieve the burden on office staff and accountants. Some also offer features to enable custom financial reporting and even the ability to accept credit cards without paying a penny in merchant fees. In other words, failing to automate is unnecessarily expensive in this day and age, especially since automating with the right software can literally pay for itself.
Make it Easier to Get Paid
A well-designed invoicing system will give customers options that allow greater convenience and financial flexibility. Provide digital e-invoices and the ability to pay securely using any mobile device, monetary currency, and payment method. Pair the invoices with instant payment receipts that are also generated electronically. Let customers pay day or night, 365 days a year, and it greatly increases the chances that they will pay like clockwork.
Timing is Everything
Research that analyzed more than 12 million invoices revealed that most people pay their invoices approximately two weeks after the due date. One way to try and solve that is to invoice on Net 15 terms, versus Net 30. A more client-centric strategy that gives the customer more control is to offer an automated installment plan. Similarly, businesses with steady customers can avoid hitting them up with frequent bills by using recurring billing or subscription plan invoicing. The customer signs up once and then the process happens automatically, with no friction. While that is too labor intensive to be practical for businesses that do paper invoicing, it’s virtually labor-free with good invoicing software.
Communication is Key
Many invoicing issues can be solved just by engaging the customer with better communication. Before performing a service or delivering a product, provide the customer with a comprehensive quote that spells out payment terms and option. That helps them budget ahead of time, and usually means they’ll be prepared to pay in a timely fashion instead of postponing payment.
Following invoicing best practices means that valued clients don’t have to be pestered for payments, in a way that can erode business relationships. Accounts can be reconciled faster and more accurately. Cash flow becomes a healthy, steady stream versus an annoying dripping faucet. With no more waiting and wondering if and when the payment will arrive, business can keep moving forward, with competitive confidence