When it comes to running a successful business, being able to effectively and efficiently invoice and bill your clients quickly becomes a fact of life, but it’s often a little harder than many businesses first expect. Here are five billing and invoicing lessons that every business must learn at some point so that they can manage their finances well.
- You must set your terms
Sending off an invoice without any payment terms can leave you in a tricky situation. Gone are the days of needing to stick to a 30-day payment term, now you can choose your own, be that five working days, 7 days or longer. Be very explicit with your payment terms, whatever they may be, and be sure to cover due dates, late fees, how you want payments to be made and what will happen if a client does not pay on time.
- Don’t be scared to chase up
As a business owner or freelancer, chasing invoices becomes a fact of life. Never be afraid to chase up an invoice if it is late to be paid. The vast majority of the time the client has simply misplaced it or has forgotten to pay and it is very rare that payment would be withheld for malicious purposes. You are owed that money – so go get it!
- Invoice ASAP
Unless you have agreed otherwise, always invoice as soon as you finish the project rather than waiting until the end of the month to ask for payment. As soon as your work is done, you are owed payment for it, so send your invoice out straight away and value your services. It’s also wise to send out your invoices straight away while the project and the terms you have agreed will still be fresh in the minds of all parties.
- Make sure you have all the info you need from the beginning
It’s important that invoices are sent to the right person and include all of the necessary details to ensure that you get paid. Be sure to attain the relevant information in advance, which includes who to send it to, whether the client needs any particular project codes or information on the invoice and how much of a breakdown they need you to include when describing your services
- Sometimes outsourcing is best
Last but not least, although it can be tempting to struggle on yourself, sometimes it’s easier for everyone involved if you consider outsourcing your billing and invoicing. This is especially true if you are operating in a niche space and need something specific such as lab billing services. Outsourcing your billing and invoicing simply means that someone else handles the leg-work, and although you will need to pay for their service, it could save you a lot of time and stress, ultimately improving your efficiency and workflow. It’s definitely something to consider.
So there you have it – five billing and invoicing lessons that every business owner needs to learn at some point. Have you been through these lessons before? Let us know if you have any to add by leaving them in the comments.