According to a 2012 Wall Street Journal survey, 64% of small businesses had unpaid invoices that were more than 60 days old while 20% said the problem was getting worse. I get asked all the time what helps a company get paid. For this reason I have looked at and analyzed over 250,000 invoices. I’ve found that most business owners make the same mistakes when trying to get paid.
Here are some of the most common errors that I have found:
- There are too many human errors with missing or inaccurate information.
- The invoices look unprofessional and don’t reflect your company’s brand image.
- The invoices have no numbering system so the numbers are duplicated or missing.
- The invoicing system uses a lot of paper, which is adding to the overhead expenses.
- And, most importantly, the invoices are not getting paid on time.
It kind of makes a lot of sense that, if you could fix these irritating conundrums, then you would get paid faster, on time, and maybe even earlier than the terms listed on your invoice or the terms stipulated in your agreement.
To be able to accomplish the feat of getting paid quicker, or at least getting paid on time requires a quick review of your current invoicing system to see what it looks like at present. You may want to consider the 10-minute process that I am about to describe to you which can be applied to your current invoicing conditions – and these problems will be fixed. These are the exact tips that I recommend to people to get paid.
Minutes 1-3: Look at everything involved in your invoice system, including how your current invoice looks. Does it have a logo and color scheme that matches your brand or does it seem like it was created in Microsoft Word (because it probably was) and seems to be in different fonts with no columns or any recognizable format. If you created it in Word, is there a numbering system to keep track of the invoices? Does it have all the information that your client needs to pay you?
Quick Fix: Give clients what they need by selecting a free online invoicing template. Be sure to get one that is customizable so you can put your brand on the top so they keep who you are at the top of their mind. Add the standard information, such as billing address, phone number, and email address along with anything else that is important. This could include date, invoice number, a contract number or purchase order number (if applicable), or tax ID number. Putting this information on every invoice means your client doesn’t have to look it up on their end. This small courtesy to your client will equate to a faster payment.
Minutes 4-5: Look at where the human errors have occurred the most in the past. It might be transposed numbers, a missing payment amount owed for one part of a project, incorrect addition in the number of hours or pay-rate-per-item, or other mistakes related to taxes or discounts.
Quick Fix: Find an online invoicing tool that does the math for you – one that tallies the numbers you put it and will note to you a potential error in what you have entered. It automatically totals the invoice for you and provides places to enter tax, a discount, or fees to remind you what needs to be on the invoice. Even better is an online invoicing tool that tracks your time and then transfers this data directly into your invoice so that it even makes sure you have accounted for the correct amount of time on a project.
Minutes 6-7: Consider how and when you invoice to make sure you are doing so as soon as possible. Putting the invoice task off one day because you had too much else going on just means your payment will be one to three days (factoring in that the weekends seem to crop up) longer than it will normally take to get paid. The faster you send out invoices, the quicker you are likely to get your money – improving that very necessary (for most of us) cash flow.
Quick Fix: Turn to an online invoicing tool that lets you create invoices on the fly (even on your phone) in a quick, easy way so you can get this matter finished, done, and off your plate. This type of tool can even let you schedule invoices in advance in case you know you are likely to be very busy around invoicing time. You can even set up recurring invoices with a specific date if the amount is the same each pay period. In this way, the invoicing tool is working for you in multiple ways while you are focused on making more money.
Minutes 8-10: Get rid of a paper invoice system altogether. Not only are you spending way more money on resources you don’t have, or don’t want to be using, but you are also relying on a system that helps you to create invoices in one central location, and gives you the freedom to do your work from any type of device – wherever you are working at that moment.
Quick Fix: Migrate to an online, cloud-based invoice system that includes the ability to provide online payment options. By invoicing your clients online, they can get an invoice in their inbox or a notification that allows them to go straight to a payment portal to pay as soon as they receive it. This cuts out any mailing delays and puts the option of your client being able to use their bank account, credit card, or other type of payment portal like Intuit, PayPal, or Amazon Payments to take care of the invoice. They can even set up automatic payments to go with your recurring invoices so the online system does the work for both of you.
10 Minutes Later
In just ten minutes, you have reduced paperwork and the expense, slashed invoice mistakes, added a professional look to your invoices and moved into the current technological age with an online process for invoices and payments. While these may seem like small steps in such a short time, you have completely transformed your invoicing system with a free, revolutionary online invoicing system.
If you follow these simple tips you will eliminate 95% of the problems that what we’ve found that most businesses make while invoicing that cause them not to get paid.
Here’s to every bill being paid on-time!