As a small business owner or freelancer, Im sure you love what you do. But I’m sure you can’t do it for free, and Cash is the lifeline of your business. Big companies have the luxury of having entire departments dedicated to accounting, unfortunately that isn’t the case for small businesses and freelancers. Not getting paid and spending excessive amounts of time focusing on being the accountant can kill your business.
Using and maximizing your invoicing platform can be key in your business success. It is important to get paid easily and on time. We talked to many successful freelancers and found a few great tips and tricks of how to maximize your invoicing platform.
1. Set short payment terms
When sending an invoice to a customer you have the ability to specify the time frame on most invoicing platforms. The industry standard is 30 days, but that isn’t the best time if you want to maximize your chances of getting paid.
The average debtor pays two weeks late, according to a Xero analysis of more than 12 million invoices. Experts at Xero recommend setting payment terms at 13 days or less if you want to realistically get paid within 30 days. It can help you get paid within that 30 days and avoid being one of the small businesses that on average have more than $5,000 owed in unpaid invoices. Online invoicing makes it that much easier for you to set these shorter payment terms and help guarantee you get paid, and get paid on time.
2. Follow up
If you don’t get paid immediately, no need to sweat. It is important to send your customers reminders so they can meet their deadlines. Sara Rosenfeld from Wave accounting says, ” It’s appropriate to send reminders a week before the payment is due, the day it’s due and every week after it’s late, For big-ticket items, such as a $5,000 order, it’s acceptable to send more frequent reminders.”
If you are worried about annoying your client or seeming pushy, it is important to make sure you always use polite language. You can also always use software that can create automated payment reminders to make it feel less personal.
At the end of the day you shouldn’t be concerned about sending frequent reminders. We are all familiar with the business world and we know how important prompt payments are. You sending reminders should come as a surprise to no one.
3. Create a numbering system
Numbering invoices is a must when it comes to keeping track of all your payments. This is key for your own organization as well as for tax purposes. There are many invoicing platforms that offer this for you but make sure you find a system that works for you. If you are new in the business world it makes sense to start with a number higher than 001 so that you seem like more seasoned in the invoicing world.
