For some people like myself, invoicing is a huge pain. Out of all the tasks for my business, I’m pretty sure I hate invoicing the most. Not only that, but the ability to track invoicing is not something that comes naturally to me.
It’s not that I don’t like getting paid. I just hate the process of actually writing and sending the invoices. And, since I have this limiting belief that I’m not a numbers person, it can be intimidating.
The problem is business owners better learn how to track invoices. That way they know that know how much is coming into the business, what’s been paid and who still owes you money. In fact, avoiding this will lead to a lot of headaches.
Here are some of the strategies I’ve implemented over the years to track invoicing without driving myself insane.
Use an invoicing service.
I once worked for a company that was still manually creating invoices on Microsoft Word and mailing them.
Even though I didn’t yet have my own business, I still knew better and always wondered why we were wasting our time (mostly because I was the one who had to write them).
This only led to confusion as to who had been invoiced, who owed us money and what had been paid. We’d also have to chase people for payments all the time.
Invoicing software can also get a better handle on processing fees. I still remember my old boss complaining about all the fees every time the statement for the point of service system came in. By using an online service, you can shop around to see who will give you the best deal on a fee structure.
And finally, these interfaces can usually help you track everything you need to know through reports that are automatically populated based on data from your bank accounts. You may need to do a little tweaking and reconciling, but not much.
Automate your invoicing.
Another easy way to track invoicing is to automate it. For example, you can use an invoicing service to automate when invoices go out.
You can also automate follow-ups so you or your team don’t have to take time out of your day to manually follow-up. This alone can save you time and ensure you get paid.
Delegate it to someone else.
The first thing I delegated to a virtual assistant was creating and sending invoices.
We’ve created a system between the two of us that helps us both track invoicing and stay on top of the money.
- The work for a client is completed.
- I say what I did in our project management system, how much it was and when they get invoiced.
- My virtual assistant takes care of the rest.
By giving my assistant the information she needs as the month goes on, we just get it done. There’s no going back and forth about who needs to get invoiced on the day they are supposed to go out.
Additionally, I have an accountant who also does bookkeeping for me. As a business owner, my time is much better spent on other tasks like getting new clients.
At this point, I know when everything has been reconciled so if I need something I can just go in to run a report. After all, what gets measured gets improved.
Kick it old school.
Even though I use online tools to track invoicing, I still like to kick it old school with a spreadsheet.
Note, the spreadsheet isn’t for creating an invoice manually. It’s just for me to keep track of accounts receivable, who has been invoiced and who has paid.
I personally like to see it that way because I feel like it makes my life easier to see some of the numbers in front of me. From there I can add a note for my assistant in one of the columns if need be.
The reason this works for me is that I’m a very visual person. I also like things having to do with money to be as simple as humanly possible.
While I may love the reports in my accounting and invoicing software, sometimes they overwhelm me. This means I still often feel like it doesn’t give me the whole picture that I’m personally looking for.
Find something that works for your personality.
My preference for a spreadsheet is just a personality thing.
There are plenty of people who do just fine tracking the numbers in their invoicing software. I just happen to like the extra spreadsheet to make sure I have the exact numbers I’m looking for.
The only real downsides of the spreadsheet are that I can’t track my time on them. I also can’t automatically send off a follow up straight from the spreadsheet itself.
Then again, I’m not really using the spreadsheet for the act of invoicing. I’m simply using it as a visual representation of how much money I’m supposed to have coming in each month so that I know what to expect even before invoices go out.
The spreadsheet also helps me keep better track of things come mid-month. If I know I’ve already done $4,000 worth of work by the 15th of the month, then I’ll know what I need to do the rest of the month to double it.
Besides, it’s not like I’m taking away from income generating activities because it’s my assistant who populates the spreadsheet with the information I give her throughout the month.
The ability to track invoicing can make or break your business. Make it as easy as possible with online tools and by delegating. Additionally, you may want to find a system that works well for your personality so that you get the information you need without driving yourself insane.