Common Invoicing Mistakes to Avoid or Fix

Common Invoicing Mistakes to Avoid or Fix

Receiving timely payments is vital in keeping a solid business. When you are a startup owner, money is crucial. You don’t want to mess it up as it can disrupt your business operations. Sending invoices and getting paid might be straightforward but many people commit mistakes that lead to delays.

Not having a steady flow of income can affect the business and this is something that you should avoid.

To prevent late payments and maintain positive cash flow, here are the common invoicing mistakes that you should avoid/fix:


1. Forgetting to invoice

Business owners are always busy and sometimes, they forget to send out a bill. It’s obvious. The sooner you send your invoice, the faster you will get paid. Not setting a billing date and having invoicing slip in mind will impact the cash flow.

Whether you send your invoice at the end of the month or after a service is rendered, send the invoice promptly. Don’t assume that the customer will pay you without you sending an invoice. Sending the invoice is your responsibility and should be a priority.


2. Not Following Up

Sending your invoice does not end there. You’ve sent it but two weeks have passed and still, you have not received any payment. This happens always. Clients and customers are always busy and they forget that they have invoices to settle.

Following up will solve the issue. This ensures that the client has received the invoice and has the intention of paying it. You can set customized reminders using invoicing software if it feels awkward for you to tell them about their missed payments. Chasing late payments is never fun but it is your task to contact the client immediately about the unpaid invoice.


3. Sending the Invoice to the Wrong Person

Large companies have different departments for specific functions. If you are dealing with the person who is not in-charge on making payments, it can cause delays. Make sure that you get the right information from the right person. Sending invoices to the wrong person may appear unprofessional and frustrating. Also, this simple error can present a bad impression on the client, assuming that you are not a detail-oriented person to work with.


4. Not offering Itemization and Clarity

Put yourself in your client’s shoes. Even if you are willing to pay, it can be frustrating if you don’t know what exactly you are paying for. When creating an invoice, always ensure that every service rendered and product purchased are listed with their corresponding value.

If your customer can see how fees add up to the total payment, it gives them transparency. By providing clarity, you are strengthening client-business relationships. Don’t send invoices with vague descriptions and without the breakdown of costs.


5. Adding Hidden Charges

No one likes undiscussed fees. Customers do not like seeing hidden charges and this can likely make your customer angry. Receiving an invoice and getting surprised by unexpected fees can make them question your act and worst, not pay the outstanding balance.

This is a crucial mistake because it builds trust issues. No one will be happy with any extra fees. This can frustrate your client, doubting your credibility, and jumping to your competitors. If you want to bill more than the original amount that is being discussed, communicate with your client first. Make sure that your client understands the reason why taxes, add-ons, etc. are added.


6. Committing Mistakes

Double-checking your invoice before sending it to your customer is extremely important. Entering incorrect details, misspelled names, errors in amount and deliverables will make you look unprofessional.

If clients see that you lack care and attention, it can translate to you not being serious at what you are providing to them. Such discrepancies can lessen trust and affect a brand’s credibility.  Proofread your invoice before sending it will help you avoid disputes and late payments.


7. Lacking Company Branding

You may ask why we included branding on this list. While this may look like a small element, it is not something to be ignored. Sending generic invoices like what you are doing in Word or Excel looks unprofessional.

Invoices should make a good impression. Include your business logo and customize the invoice with some touch of colour and design. Branded invoices increase brand recognition and marketing opportunity.


8. Failing to Back-up Invoices

Never rely on a single resource. If you are sending invoices electronically via a software, make sure that you have kept back-up copies in case the software crashes or your computer fails. Having a system that keeps information safe and accessible any time creates clarity and prevents any issues.

There may be a time that your client will request an invoice archive and failing to provide it can reflect that you are not managing their account responsibly. In the business side, losing track of invoices can ignite miscommunication and other financial issues.

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