You do the work, bill the client, and get paid. Nothing to it, no? Well, right there in the middle, the very epicenter of the whole transaction is that one task: bill the client. This one basic business mainstay – the invoice – deserves a little bit more attention. Who knows? You could end up getting paid faster.
The Importance of Invoicing
The obvious reason for invoicing is to get paid, normally within a certain time frame. But if you widen your perspective on this simple process, you’ll see that invoices are more valuable to any business than they seem at first glance.
Record keeping, for instance, is something you should take quite seriously if you want your business to thrive. But they’re also the ace in your sleeve should a revenue agency inquire about your earnings. Being audited is fun for no one, but when you have documentation, it’s certainly less stressful.
While invoices are not legally binding documents on their own, it can be evidence of your adherence to an agreement between yourself and the entity you’re billing. Invoices can and should reflect terms used in project contracts both parties have signed identifying rates, the scope of work, and more.
Not to mention, invoices are used by professionals. Dropping someone a line and saying “Hey, you owe me for this” is very poor form.
Invoicing Effectively
If you ask a handful of businesses and contractors, you’re sure to come up with someone who wishes their clients paid their invoices faster. In fact, some rely on services like Invoice Factoring Australia to get paid quickly.
The reasons for an overlooked invoice will vary, but you can start by making sure your invoice hits all of the right marks. The first is making sure the invoice is clear from you. Your logo or contact information should be one of the first things anyone who looks at it will notice.
If there is absolutely anything else you need to remind a customer of, especially if you used abbreviations or acronyms on the item lines, include a “Notes” section which more clearly explains these.
Speaking of item lines, don’t bundle things together if you can avoid it. You want the client or customer to see very easily what they are paying for. This is a huge reason why some invoices get disputed; the charges didn’t look right when they opened it. Never assume that a client or customer will carefully examine an invoice. They want to take a peek and quickly recognize what they bought, and how much it was.
Be sure to make use of purchase order numbers, if applicable, and invoice numbers. How you use these will vary on your method for keeping records.
Finally, if you’re emailing the invoice, an active link they can click on to pay it instantly is a huge help. The more convenient payment is, the more likely you are to get it fast.
If you want your money, you have to have a handle on billing. Don’t just throw invoices into the wind and pray payment is on its way; inspire immediate payment with a professional appearance, clickable links, and complete information.
