Invoicing may not arouse much excitement, but it is an essential activity, nonetheless. We do commit mistakes while creating invoices, especially online invoices and they can prove costly to your business.
We tend to commit certain common invoicing mistakes and it is a good idea to know the mistakes and the ways to avoid them. This blog discusses the topic.
Forgetting to Invoice on Time
Forgetting to invoice on time results in delayed payments and you know the impact delayed payments on your business. Excellent customer relationships, nonetheless, your customers don’t pay you unless they are invoiced. So, get organised, have an invoicing schedule and act upon the schedule. Automate your invoicing or make them recurrent so your customers are invoiced while you are busy at other work. Do whatever it takes, do not miss timely invoicing.
Not Following up on your Invoices
Not all customers, with due respect, respect timely payment commitments despite receiving invoices. So, timely invoicing is half your task done, you need to follow up. And persistently sometimes. You may also need to identify or keep track of customers who have not been paying over a period. In such situations, you may need to generate reports to identify defaulting customers. It may also be useful to send periodic reminders. We strongly recommend using a good online invoicing software for small businesses.
Setting Unclear Payment Terms
When your payment terms are ambiguous, confusion ensues, and timely payment is likely the first victim. But worse may follow, with the customer refusing to pay until the payment terms are settled. We recommend setting clear payment terms on the invoice in a quality accounting software and sending it to the customer.
Invoicing with Unclear Product Itemisation and Taxation
Your invoice should contain the details of the products or the service you have rendered to your customer.
Sending Invoices to the Wrong Person
Wrong invoice to the wrong recipient, though human, doesn’t reflect well on your business. Add to that, you waste effort and time because you might not know that the invoice was sent to the wrong recipient until you hear from the recipient or find out yourself. It helps to have a software where you define the contact email ID and send invoices. You also have reports to show invoices sent to customers.
Not using Your Brand on Invoices
Branding helps. It helps to impart that professional, cool look to your invoices. While financial, technical and legal correctness are essential, visual appeal adds to your business brand.
Invoice Numbering – Key Feature
Think of this – you have sent many invoices and face queries on a few of those invoices. If you have been manually doing that, identifying the invoice is a nightmare. A quality accounting software would number each invoice and provide searchability by numbering. Just imagine the time and effort it could reduce.
Having Hidden Fees
There are many ways to irk your customer and hidden fees is at the top of the list. All fees and financial terms and conditions must be clearly agreed at the beginning. Any surprise, in terms of fees or charges, can not only irk but also drive away your customers. Not to speak of the potential prospects you have lost.
Not having Multiple Payment Options
The customer wants to pay through the most convenient channel. The more the payment options you have, the easier it is for the customer to pay. When you have varied payment options, you go a long way in ensuring timely payments, customer satisfaction and convenience.
Not using your Invoices as a Marketing Tool
While you may be using dedicated channels to promote your business, did you know the invoices you send can also act as brand promoters. Sneak in a word or two about a product promotion or offer in the invoice or offer a discount in a one-liner. You never know, your invoice may land you more business.