Small and medium business owners like you might see invoicing as a tedious, albeit necessary process. Really, you should be excited by invoicing. After all, you are getting paid!
That being said, SMBs and freelancers still make mistakes when it comes to invoices which can often waste time and tie up funds. Luckily, most of these hiccups can be remedied with extra attention to detail.
First things first. It’s important to understand when to send your invoice to the client. Ask for their preferences. For example, “Would you like me to send an invoice after the project has been completed, or on the first of the month?”
Once you have the timing pinned down, be sure to stick to it. Procrastination often leads to forgetting, which can both botch your relationship with the client and delay the payment to you. Think about it, as a freelancer or contract company, you wouldn’t want to work with a business that is consistently late in its payments. So, why would a client want to work with you if you are consistently late submitting an invoice?
You should also ask with whom you should share the invoice. Sometimes SMBs and freelancers send their invoice to the person or team they are working with most closely. This person or team will then forward your request for payment to the proper channel.
But things don’t always work out this way, and your invoice will sit in your contact’s inbox without ever being shared with accounts payable. Be sure to get the contact information of the proper department so you can get your payment on time.
Every now and then, an invoice will fall through the cracks and go unpaid. Most of the time this is due to a simple clerical error. You’ll probably want to send a reminder about the unpaid invoice via email or make a phone call within one week of the agreed upon payment date.
If you do find you ended up with a deadbeat client, you should have a plan of action for that too. You may need to contact a collection agency to chase down the delinquent payment. It may not be in the best interest of your time chasing down payments so a backup plan is a good idea. Another method that might work is to reach out to a lawyer who can send a warning and demand for payment using their letterhead. This could be enough to goad your client into paying, without having to take it any further.
This is a crazy fact but did you know that you are three times more likely to get paid if your invoice includes your company logo? It’s true. According to Due.com, an online service that provides invoices for business. Including a brand image not only improves your chances of getting paid on time, it also serves as an opportunity for your business to look professional and make a good impression on your customer.
But don’t stop at the logo. Play with formatting, fonts and colors to reflect your branding and differentiate your invoice from others the client is receiving.
A poor template can make your company look careless and lazy. The same thing can be said for clumsy editing. Do your best to always appear professional and put together – especially when sending your invoice for payment.
Remember to include your:
• Company’s legal name
• Phone number
• Office address
• Invoice number and date
• Due date
• Client name and address
• Payment terms
• Itemized list of rendered products and services
• Any legally required tax numbers
Once you’ve submitted your invoice and received payment, you’re all done. Right? Wrong. After the whole process has been completed, take a moment to save and back up your invoices in a secured cloud or database. Backing up is an essential part of good bookkeeping and becomes even more important at tax time.
Follow these guidelines and you’ll be sure to decrease the time and effort you put into tracking down delinquent payments.