Want to Get Paid Faster? Make Sure Your Invoices Have These 5 Elements
One of the biggest challenges business owners face is in getting paid. Creating, issuing, and tracking invoices is only the beginning of the battle. Even if a business never has a non-paying customer, late payers are inevitable. Some customers will pay immediately, while others will wait until the 30-day mark or beyond. These delayed payments slow down your cash flow and make it difficult to pay your own bills on time.
The process of getting paid in a timely manner begins with your invoices. A professionally-designed, detailed invoice will reduce delays due to confusion. Instead of setting invoices aside to deal with later, your clients may pay them immediately. Here are a few things you can include on your invoices to ensure you get paid more quickly.
Invoice Tracking Number
Managing your finances means always having visibility into everything you do. To do this, you’ll first need to include a number on each invoice that you tie to your internal invoicing system. Having a number tied to each invoice will make it easier to determine which invoices have been paid and which haven’t. When you contact non-payers, you can provide the invoice number to help them more easily look through their own records and find the broken link.
Another benefit of a tracking number on each invoice is that it lends an air of credibility to your paperwork. Your clients will realize you’re keeping track of the invoices that have and haven’t been paid and won’t allow a non-payment to fall through the cracks.
When your customers receive an invoice, whether by email or on paper, do they know what to do with it? They may have the invoice in hand, but payment is a mystery. If all you’ve done is provide a mailing address and they prefer paying electronically, you may delay payment because you haven’t given an easy option. Conversely, if your electronic payment systems don’t match their own internal procedures t pay by paper check, you could also be waiting weeks for payment to arrive.
If your invoice is sent electronically, include a link that lets them pay by credit card in a matter of minutes. Include your mailing address, as well, in case they’d prefer to pay through the mail. If your employees travel around, equip them with mobile-enabled credit card readers to allow them to accept payments immediately. This may keep you from having to issue an invoice to start with.
A due date can make a big difference in your payment speed. Most clients don’t want to get into a situation where they’re late on a payment, so seeing a date gives them a deadline. Instead of putting wording like, “Due in 30 days,” put an actual date on your invoice and make sure that date is enforced. Your automated system should be set up to send a late notice once that due date has passed.
In addition to a due date, you should also include any fees that will apply if the invoice isn’t paid within a certain timeframe. You can include this information at the bottom of your invoice, with wording such as, “Late payments will be charged a penalty of X percent per day.” This late fee should be outlined from the start of your working relationship with a new client, usually through your initial work agreement or statement of work.s
Detailed Description of Services Provided
Confusion can often delay payments, especially if the person handling invoice payments is in a separate department from the person who hired you. You may find that your invoice is caught in a holding pattern for months while one department waits for communication from another department. Instead, make it as clear as possible what services you provided and, if possible, which employee of that business received the service.
If the work you provided involves work for the company website or social media pages, describe that work and add a link if you can. As you create an invoice for each new customer, it might be worthwhile to have a phone conversation with your contact about the information that will need to be included in the invoice.
Before you send off your invoice, be sure you have up-to-date contact information for your business. This doesn’t just include the information they’ll need to pay you, such as your address or PayPal email address, but it also means you should have a way for your clients to contact you if they have questions. You should have a phone number they can call for any questions they have about the invoice. This will ensure questions are answered quickly so that they can approve payment and get the money they need to you.
Including a contact phone number isn’t enough. You must make sure that when your clients call, someone is available to answer. An inability to reach you or one of your employees with any issues they have will only frustrate them, leading them to set your invoice aside and forget about it. If you are too busy to pick up the phone every time one of your clients call, consider outsourcing this part of your customer service to a virtual assistant or external contact center.
When businesses work to improve their invoicing processes, they speed up payments and ensure they have the money they need to pay their bills. With just a few adjustments to the invoices you send, you can improve your cash flow and keep your attention focused on building your business, rather than chasing down late payments.