Cashflow is crucial to business and one of the easiest and most effective ways to keep your cashflow positive is to get control of your invoicing. You want to actually get paid for the work you have done.
Invoicing on time, with accuracy and following up on payments are all vital to business success. Your invoices serve as a formal request for payment and failure to create and send them could hamper the success of your business. If payment of your invoices is delayed, it can negatively affect your cashflow.
Now is the time to improve your invoicing process. The process determines when and how you are paid for your goods and services. While many businesses issue invoices at the point of sale, others need to issue invoices after goods or services have been given. This is when it becomes imperative that you stay on top of your invoicing as a priority.
Here are some ways to make sure your invoicing process keeps your cash flowing.
Invoice design
Make sure your invoice is clear and easy to read. Reduce confusion and the need for clarification. Ensure that you have met all tax and legal requirements with your invoice and keep a standardized invoice layout. Always include the products or services provided, total payment needed, when it is due and how your clients can make payment. Keep it clear and simple. This ensures professionalism and increases the chances of getting paid on time.
Invoice timing
Invoices should be sent out as soon as possible. Waiting until the end of month when you could invoice sooner means you may not be getting paid on time to keep your cash moving. Waiting on invoices will only slow down your cashflow.
Invoice accuracy
Ensure accuracy on your invoice. Incorrect details on your invoice will create payment delays while you and your client work it out. Avoid making mistakes that lead to undercharging or overcharging, which can also lead to delays.
Invoice automation
If you don’t already, not may be the time to get some accounting software. It will help you automate your invoicing process, ensuring accurate and timely invoices are being sent. Any invoices that are sent regularly can often be set up once and you don’t have to worry about them again. It saves you time and reduces the chances of late payment.
You can set up automatic payment reminders to remind your clients of unpaid invoices. It will help you keep a track of your payment history and outstanding amounts.
While it may seem like a big investment to start with, the effort and time to set up an automated system will have long-term benefits.
Follow Up
Priorities following up on unpaid invoices. The longer an unpaid invoice is left, the longer it will take to receive payment. Your bills won’t stop, so you need to ensure that your invoices are being paid. Keep following up on outstanding debts until they are paid.
Invoice Payment
Think about how your invoices get paid. Is it easy for your clients to pay you? If a client has to go through a lengthy process to pay you, they are more likely to put it off. Make sure your payment options are simple and easy. Your new accounting software may be able to make it even easier.
Keep on top of your invoicing to make sure you are getting paid and you cash can keep flowing.
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