Small businesses must therefore implement an efficient and accurate invoicing system to ensure they receive payment for the services they provide. You should also produce and deliver invoices at the lowest cost possible.
If you’re trying to figure out the best way to invoice your small business client, check out these tips.
Set the Terms
Establish your company’s billing terms, so you can sustain good customer relations, increase the likelihood of obtaining timely payments, and avoid surprises. You should also establish whether to bill by the product/project or hourly.
Ensure you outline your expectations with every client before entering any contractual agreement, and abide by them.
For instance, if you’ve established a 30-day payment period and expect payment before the deadline, incorporate this information and make it clear so the client does not miss it. Similarly, if you intend to impose any late penalties or charges, make this clear.
When creating invoices, it is crucial they look professional. After all, if you send a client something that appears amateurish and cheap, they may not be inclined to make timely payments, as they would be if you exercised professionalism.
Add your logo and ensure the amount owed to you is clear. You should also consider how the wording and colors of the document mirror your brand.
Create Detailed and Clear Invoices
Include all essential details on the invoices while maintaining readability and clarity. Label the document, so your client recognizes it at first glance. Include a tracking number, your client’s contact information as well as yours.
List out the services or products clearly together with quantities, unit prices, applicable discounts, taxes, and the final amount you wish to collect. If your bill is partial, clarify this in the invoice. You are likely to receive payments faster if you make it easier for clients to understand the invoice.
Make it Legal
Your invoice should comply with the VAT requirements because it’s a legal document. The document should also comply with company rules. The invoice should display your registered number and address if your business is a limited company or LLP.
You don’t have to pester your clients, however; it is reasonable and frequently appreciated if you remind clients about imminent bill deadlines.
You could send reminders before the due date or the day before. Determine what’s best for your clientele and business. This is particularly useful if you charge a late fee; a reminder will result in savings for your client.
Select Your Pricing Structure
You have the right to ask your clients for upfront payment or deposit before you perform the task. This will verify a customer’s commitment while boosting your cash flow.
Furthermore, it spreads the monetary risk between you and the client. If you are concerned about customer loss because of upfront payments, consider providing a money-back guarantee to clients that are unsatisfied with your service.
You’ll want to track invoicing as part of your record books. Incorporate details of the date you sent the invoice, the recipient, when/if they received payment, and the amount you received for a payment. You may also want to incorporate a numbering system to help you track invoice records.
Even if a client favors a printed invoice, send an extra electronic copy. This generates a paper trail, which is important in case a legal dispute arises. Ensure you record price changes, project details, and communication in a similar way.
Invoicing is a crucial part of any business’s operations because clients won’t know the amount they should pay you without an invoice. While there’s no ideal answer to cash management for invoicing, adopting these tips could mean avoiding the many common problems that arise from collections, billing, and invoicing. Adopting these tips could also help alleviate the burden of invoicing and sustain your cash flow.
Dailey Bookkeeping Services is a Xero Certified Bronze Partner and a QuickBooks Online Certified Advisor, so if we can help you with efficient invoicing, just give us a call, we would love to help you! The owner, Jacqueline Dailey is a Certified Public Bookkeeper, an Advanced Certified QuickBooks and QuickBooks Online ProAdvisor, a Sleeter Group Certified QuickBooks Consultant and a Xero Certified Bronze Partner. We work remotely so we can work with any company located in the U.S. If we can help you with this process or provide you with custom reporting, please give us a call. If we cannot help you, we will refer you to someone who can! Feel free to visit our website at http://www.daileybookkeeping.com.