How to invoice effectively and avoid late payments
Many small businesses struggle to invoice correctly their clients. Here we give some guidance about how to streamline the process, which hopefully will get you paid on time.
Display necessary information
Before asking a customer to pay, you have to do your homework. First you need to create a professional invoice that displays all necessary information. We are talking here about some basics that many owners and freelancers neglect. For instance, each invoice should clearly display:
- The word INVOICE at the top of the document.
- You need a unique reference/identifier number for each invoice.
- You need to mention the company name and address.
- You customer name and address should also be displayed.
- The date of issue and the due date.
- The total amount you are charging as well as a description of the service or the product you are providing.
- If applicable the VAT amount should also be on the invoice.
Keep record of your invoices
Often businesses ignore that they are required by law to keep a record of their invoices for six year. You can imagine how hard it will be to stay organized for such a long period if you are using Word and Excel or worst a pen and papers. Keeping record electronically could be a good solution to get shielded from all this non-core business requirements. Keepek can help keep you organized.
Establish clear channels of communication
Creating a well looking professional invoice with a thank you note at the bottom could do great for your top line. The method of delivery is also important. If electronic delivery is possible why post your invoice and waste time, paper and money. The client could easily claim he didn’t receive it. At Keepek we can tell you when a client has opened your invoice, no more excuse!
Building and maintaining good communication lines with your clients can help you get paid on time. Communication doesn’t have to be time consuming. For instance, sending courteous reminders telling a customer that an invoice is coming due or overdue is easy and effective. You are doing business so don’t be shy.
Nothing can replace common sense
Nothing can replace common sense. It is always a good idea to check with whom you are doing business before shipping a product or starting developing one. Get it right first time rather than deal with the consequences later on. Also get an agreement about the payment terms before accepting any order.