How to Manage your Small Business Invoices
Dealing with invoicing is no one’s favorite job, especially when you’re dealing with a lot of different clients. Regardless, getting paid is arguably the most important aspect of business, especially for small business owners. It is important to devise a strategy for managing your invoices. There are plenty of various methods and tools that you can utilize to create an invoicing strategy that works best for you. Here’s how to manage your invoices.
Know the Billing Cycle
Depending on the job at hand, there may be a few “types” of invoices you’ll be billing your client with. Here are two examples:
- Recurring Invoice: When you have on-going projects with the same client, it’s often best to use a recurring invoice. With these you and the client will agree upon a billing interval (usually weekly or monthly) and the invoices will automatically bill at the set interval. The client will eventually make this part of their routine, which gets you paid quicker.
- Interim Invoice: Sometimes a client will won’t want to pay a lump sum. If they ask for the payments to be broken up you must agree upon a billing interval. The intervals are usually based on time elapsed or when certain pieces of the project are completed. At the end of the project client’s often want to see a final invoice that sums up all prior billing.
The best way to keep your invoices nice and organized is by going completely paperless. There will be that one old-school client who still wants invoices by mail but you can easily work around that. Here are a few online invoicing services that I’d recommend.
- Due : Due allows you to send an invoice, track time, project management and credit card payments platform designed to help companies of all sizes with its scalable solution.
- Freshbooks : Freshbooks is small business accounting software that offers features like invoicing, expenses, time tracking, payments and reporting
- Quickbooks : Quickbooks is a full-service accounting platform that also provides tools for invoices, online payment, and financial analysis.
- PayPal : PayPal offers a simple and effective invoicing tool that has some customization and provides for online payments from customers and clients.
Here is a pro guide to getting paid quicker that should help you out as well.
Avoid Obvious Delays
Despite being obvious, you’d be surprised in how many people continue to make these same mistakes. Here are a couple problems that can easily be avoided and get you paid quicker.
- Be crystal clear on the terms: When dealing with a client it’s imperative that you are very clear with the terms. Before beginning any project you should clearly lay out all terms of the project. Including payment intervals, estimated budget, and any other clauses that protect you. Make sure the client signs this agreement so you have a physical copy.
- Send the invoice to the right person: When working for a client, make sure you know who is actually paying the bills. Sometimes the person you are communicating with on the project doesn’t have access to the company funds. In this case, be sure to send the invoice to the right person so you can avoid any unnecessary delays or confusion.
In the end of the day you need to choose the best invoicing strategy for you and your business. When the bills start rolling in, you’re surely going to want to be able to manage those invoices. This is a great place to start, so go out and get paid!