It is frustrating to receive late payments and have communication problems between the two parties. Misinformation, ambiguous invoices, and errors can also affect relationships. Without having a seamless process in invoicing, a business will not operate the way it should be.
To avoid these issues, a business needs an effective invoicing strategy.
Below are the important tips to get paid easier when and how you want:
1. Get a Contract
First things first. Without a contract, you’re at risk of getting left unpaid and you’ll end up chasing your client or customer. That sounds unethical and a sort of scam. A contract will give you protection as it ensures that a party is obliged to commit to his responsibilities. Set everything on the right foot and get the contract signed.
2. Include Payment Types Accepted
Invoicing should be easy for both parties. Tell your clients what modes of payment do you accept so that he knows how he can pay you. It is also important to be flexible instead of having only one mode of payment. If you accept PayPal, you should also be open for credit cards, check, and other payment systems. Ask your client what mode of payment does he prefer and have that agreed by both parties.
3. Know who to Send the Invoice
Sending your invoice to a person who is not in charge of making the payment can cause delays and confusion. Make sure that the person responsible for fulfilling the payment should receive the invoice. To whom will it be sent? Is there any specific accounts payable email address to send to? Find out these important details to increase the chance of getting paid faster.
4. Set Payment Terms
Here, you should list the details needed to make payments accordingly. Include the due date and the invoicing dates. Listing a due date is very critical as it gives your client a deadline and timeline to follow. Take note that timely payments are inevitable and there will be some late payers. Make adjustments depending on how you want to get paid. Usually, invoices include terms such as 14 days, 30 days, 60 days, and 90 days. However, you can keep terms as short as possible, set an upfront payment, or payment milestones. Address this to your client in a written agreement.
5. Mention and explain Every charge
Never send an invoice to your clients and customers without explaining how a particular fee is charged. If you are rendering services, keep a good record of your work that you can show to your client.
Itemize everything and include descriptions to give a customer a clear picture of what is being charged for and why. This will avoid disputes as you can back up your claims with documentation.
6. Automate your Invoicing
If you want to get paid sooner, send the invoice sooner too. You also have a responsibility to send an invoice in a timely manner. There are some instances that you might forget to send it because you have many tasks on your plate. Automating your invoice is an effective strategy. There’s a lot of invoicing software that you can utilize. You can create a template that you can edit and fill so you don’t have to create a new invoice over and over again.
Another tip is to send out payment reminders so your customers can prepare and settle payments on time. Not only does it save you time, but it also allows you to get paid like clockwork.
Aside from the above-mentioned tips, keeping open communication with your client and customer is extremely essential. Communicate with your client about the scope of the project, how the work is done, and what are the expectations that both parties need to meet. Be consistent, maintain a positive relationship, and honour the contract.