25 Ways to Speed-up Your Invoicing
There’s no way around it. The success of your business relies on you getting paid. But, invoicing can be a lengthy process. For starters, manual invoicing costs business owners or employees around two hours per week creating and sending invoices. Another two hours will be spent reviewing invoices to be paid – and that’s not even discussing the time spent chasing late payments. On top of that, a majority of invoices are not paid on-time within 30 days.
Simply put, invoicing is a time-consuming process.
The problem is that this isn’t just preventing you from working on other tasks, it’s also hurting your cash flow.
The goods news is that there ways to speed-up your invoicing process, from creating invoices to getting paid faster, by following these 25 tips and tricks.
1. Keep accurate records.
Before you start invoicing make sure that you keep accurate records with time-tracking software. This way when it’s time to invoice you can simply transfer this data onto the invoice. Additionally, it will eliminate any questions that the client may have when they receive the invoice since they know how long you spent on the project.
Need some suggestions? Here’s a list of 101 time tracking companies that you can check-out.
2. Utilize the right tools.
You also need to ditch the manual invoicing process and move to a cloud-based invoicing system. This completely eliminates tediously creating invoices in a spreadsheet and waiting for a payment via snail mail. Platforms like Due allow you to quickly create electronic invoices in just a matter of minutes and then get paid almost immediately. Best of all? You can send and manage your invoices from your mobile devices so that you can access them wherever you are.
Since there are hundreds of payment companies available, all of which have various and unique features, it’s best to take advantage of the free trials or demos so that you can find the platform that best suits your business.
3. Speed-up Your Invoicing by Seting your terms.
After you’ve found an awesome invoicing platform, you need to sit down and think about your payments terms. While these will differ from business to business, your terms will generally cover:
- if you bill hourly or by the project;
- your fee and any additional fees;
- The scope of the work;
- when the project is to be completed;
- the various types of payments you accept;
- a timeframe in which the client is expected to pay the invoice – instead of 30 days, reduce it to 14 or 21;
- the penalties charged to the client if the bill is past-due.
You can be a little flexible with your terms depending on the client, but for the most part they’ll remain the same for every new project that you take-on. Clearly explain these terms with client prior to working a project and make sure that they agree with them so that they won’t be surprised when they receive the invoice.
4. Ask your customer, “How and when would you like to pay?”
Even if you have set your payment terms, they may not always gel with the client. Ask them how they prefer to pay and what their billing schedule is. Doing so will encourage them to pay your bill faster – and it takes the guessing out of when and how to charge your clients.
5. Collect payment at the time of the service.
Instead of sending your client a bill and waiting for them to pay it, look for ways to collect a payment at the time of service. For example, if you’re in the same location with the client then use products like Square or Flint to process their credit card through your mobile device.
You could also process payments over the phone, requiring them to make a payment through an online store before they can access your products or services, or using chatbots on Facebook Messenger.
6. Require up-front payments.
“One of the most intuitively effective ways to manage customer payments, and decrease payment time, is to simply demand payment up front, prior to services being rendered,” writes William Lipovsky in a previous Due article. “Receiving payment prior to providing your services ensures that you have all of the money required for the inputs for the product or services provided – the labor, materials, overhead, etc. – prior to beginning to work on it.”
Most freelancers or businesses request 50% upfront and 50% after the completion of the project. But, there are other options, such 50%, 25% in the middle, and 25% in the end. Furthermore, if you’re an attorney or accountant, you may want to look into retainers.
7. Have a clean and consistent format.
An invoice should be simple and to-the-point. It should be easy for your clients to understand so that they can be read quickly and immediately upon receipt. Simply put, don’t make invoicing any more complicated than it has to be.
Just make sure that your invoices contain the following information:
- Description of product or service
- Order number
- Invoice number
- Total amount
- Summary of the total payment
- Due date
- Payment options
- Details of any discounts
- Outstanding payment details
- Delivery charges if any
- Late payment charges
- Details of the GST amount
- Contact number for any queries
8. Know the right contact.
We’ve found that you are 2x less likely to get paid if you have more than 4 people on the invoice. That’s because sometimes the person you’re communicating with isn’t in charge of payments, they may just be a project manager. Cut out the middleman and find the person responsible for payments and send it directly to them.
9. Invoice groups of customers in one shot.
Do you invoice the same type of service to multiple groups of customers? For example, if you bill monthly support fees to several customers on the same price plan then most invoicing software will allow you to automatically create identical invoices for each customer in this specific group.
10. Use payment plans.
There will be times when a client or customer won’t be able to pay the full amount at the time of service, or when an invoice is due. Instead of battling them for the full payment, offer them a payment plan so that they work down the balance. You can even automate your payment plans by charging a customer’s credit card or bank account a specific amount each month.
11. Offer incentives for early payments.
Offering clients an opportunity to shed even a couple of bucks offer their invoice has been a guaranteed method to get them to pay on time. The amount doesn’t have to be substantial, even 1 or 2 percent is enough encourage a client to make an early payment.
If that’s not your cup of tea, then you could also offer incentives like a discount off of future work.
12. Impose penalties for late payments.
As for the clients who miss due dates, you should impose penalties for late payments. Again, even 1 or 2 percent penalty is probably enough to motivate them to make a payment sooner than later. If they’re aware of the penalty from the get-go they’re not going to get thrown-off-guard.
13. Get your staff involved.
If you’re an entrepreneur or small business owner, you may not have the time to frequently bill your client’s. As a result, they begin to back-up – which now means that you’re harming your cash flow. Instead of putting your invoices on the back burner, why not get your team involved by asking your most trusted employees to create and send invoices?
It not only saves you time, it also offers your employees variety and new responsibilities. I would just review the invoice before it’s sent out though.
14. Consider outsourcing.
Outsource invoice data entry to a professional finance and accounting service or a freelancer. This ensures that the task is completed with accuracy and it saves you a ton of time. This then allows you to focus on other tasks that can help your business grow.
15. Automate as much as possible.
Simple automation features will definitely save you both time and money since it can handle tasks like:
- setting up recurring billing schedules that automatically charge any recurring fees;
- sending overdue invoice reminders;
- processing invoices online so that your clients can pay you anytime, while using a payment method that they prefer;
- creating invoices based on your proposals or tracked billable time;
- issuing sales, prepayment, and credit invoices.
16. Always follow-up.
In a perfect world your clients would pay as soon as they receive a bill. But, that’s not always the case. Sometimes you may have to follow-up with your clients several times. Send the invoice with a payment reminder, picking-up the phone and call the client, or threatening legal action.
Automation will send out reminders on upcoming payments or “ping” clients until they pay the invoice. But remember there will still be times when you’ll have to do this task. I schedule a couple of minutes every week to follow-up with late-paying clients.
17. Build a rapport with clients.
Having strong, healthy relationships with your clients. Keeping clients updated on projects and responding to their emails in a timely manner helps. Sharing content the client can use to solve problems and personalizing their invoices is one of the most effective ways to speed up your invoicing. These two ways of being helpful builds trust. Once clients trust you they’ll be more likely to agree to up-front payments or recurring billing. They’ll also be more inclined to pay your invoice as soon as it arrives since they not that you’re charging them accordingly.
18. Minimize errors.
Even the tiniest error can slow down the payment process. Even worse? It can cause mistrust and confusion between you and the client. Always double check your invoices for any spelling, grammatical, or mathematical errors. Always make sure that the invoice is sent to the right client.
Thankfully, most invoicing software has features like spell check and being able to automatically compile costs and quotes, or tracked billable time so that you can minimize any potential errors.
19. Brand your invoices.
We’ve found that you’re 3x more likely to get paid if you add a company logo to your invoice. Besides your logo, colors like blue and green can influence your clients to pay the invoice faster.
20. Be polite.
Simply including phrases like “please pay your invoice within 14 days” or “thank you for your business” are just common curtesy. Better yet, those phrases can increase the percentage of invoices that are paid by more than 5 per cent! This is because being polite establishes and strengthen relationships.
Speed-up your invoicing platform with the other tools that you use saves both you and your customers time. It also makes more convenient to get paid. For example, Due integrates with PayPal and Stripe so that you can offer your clients multiple payment options. Due also works with plugins like WooCommerce so that you process payments on your website at the extremely affordable 2.8% flat rate.
22. Set-up a subscription service.
As stated in Due’s Ultimate Guide to Invoicing and Getting Paid Online, “If your invoicing software allows you to set up subscription and recurring payments you can easily decide how often your customers are automatically billed – either days, weeks, months, or even annually. It’s a great option if your business relies on memberships, newsletter fees, or recurring club dues. Additionally, you can use this feature to collect recurring donations or monthly payments.”
“Setting a subscription service takes away the need of creating and sending monthly invoices, as well as ensuring that you get paid the same time every month.”
23. Turn estimates or quotes into invoices.
Most invoicing software will allow you to convert the estimates or quotes you send a client into an invoice once a project is completed. In fact, some software is as easy as opening the estimate, clicking ‘Copy to Invoice,’ then updates information if needed. This eliminates the need for re-entering the same information, such as the date, name of client, rate, and amount.
24. Copy and paste.
What if you don’t have an estimate or quote? You can always open an old invoice and copy and paste the details that are similar to the new invoice. Just make sure that you adjust the invoice accordingly, like updating the date and client.
25. Review your invoice system frequently.
As a business owner, it’s your responsibility to make sure that your payment system is actually working and is a good fit for your business and clients. For example, even though it’s normal to have a few clients miss a due date occasionally, if a majority of them are paying late or missing payments altogether, then there’s a pretty good indication that your system isn’t functioning properly.
If you or your team are spending too much time on invoicing, then you may want to start looking into a platform that allows you to create and send invoices more quickly.
The only way to know this is keeping track of your invoices and how much time you devote to invoicing. If either some a little off, then it’s time to look into a new invoicing solution.