Business, Productivity

10 Invoicing mistakes to avoid in your small business.

10 Invoicing mistakes to avoid in your small business.

Invoicing is a pivotal part of any business, but it needs to be done properly to maintain a healthy cash flow situation. Just sending an invoice stating how much is owed is not best practice if you want to be paid on time. Your invoices can be a chance to show your professionalism and to act as an advert for your brand.

Here are ten mistakes to avoid when making up invoices.

1. Simply forgetting…

When you’re really busy it is possible to forget all the jobs you have done in a day. If a job is forgotten, an invoice won’t be sent out. Make invoicing a priority and keep careful track of the jobs you do.

2. Procrastination…

You are 1.5 times more likely to be paid if you invoice on the day a project is completed. If this is not possible, set aside a time each week/month to catch up with your invoices.

3. Not following up late payments…

Nobody really wants to pay on time, but some customers forget the due date or lose the invoice. Your cash flow situation will deteriorate if you don’t find out why you have not been paid and send out a reminder. If you still get no joy, it may have to be pursued through small claims.

4. Unclear terms…

Assume nothing! If your don’t tell them, your customers won’t understand what you expect. Make sure it is clear how many days they have to pay and what the consequences are if payment is late.

5. No late fees…

Lack of late fees can lead customers to feeling they have all the time in the world to pay! To create a sense of urgency, discuss late fees upfront and add these to the terms of the invoice.

6. Sending the invoice to the wrong person…

You will have discussed the project with an individual, but it may be someone else who pays the bill. Make sure you know the details before you send the bill or the correct person may not see it. This looks unprofessional and could cost you future work.

7. Not including enough detail…

The customer needs to know exactly what they’re paying for, so itemise everything. This means hourly rate and expenses and for the avoidance of doubt include company name, client address, invoice number, invoice date, tax numbers and payment terms.

8. Not showing company logo…

Your company logo or branding makes your business look professional and trustworthy. It also helps your invoice be noticed among a pile of other invoices.

9. Poor grammar and formatting…

These types of error just make it seem like you don’t care and reflect badly on your reputation as a reliable and sound company. Always proofread and correct errors before sending out any invoice.

10. Not being polite…

Good manners will further improve your company image. If you use phrases like “please pay within 21 days” or “thank you for your business” you are 5% more likely to be paid on time.

There are lots of online tools and packages available to help you with invoicing and there is always the option to outsource the responsibility to a virtual assistant. Either option would save you valuable time in your busy working week.