A study by HubSpot Research found that 27% of small businesses have a hard time creating and sending invoices. Another report found that small businesses owe an average of $84,000 in unpaid invoices at any given time. This does not bode well for cash flow.
Below are 5 best practices for small business invoicing to improve cash flow and get paid on time.
Table of Contents
1. Send Invoices as Soon as Possible
Sending invoices out at the right time is one of the simplest ways to ensure you get paid early. Clients may not take you seriously if you delay invoicing.
If you already have something like the best NDIS software as part of your business technology, you should find that it can help you out with invoicing, so it’s well worth exploring this if you know you’re not using it to its full potential currently. Cloud accounting software can also help you automate the process and ensure you never forget to send out invoices. It will also help you track approaching deadlines and client payments.
2. Set Payment Terms in Advance
Setting payment terms before you do any work for a client is one of the best invoicing practices. It ensures that customers know what to expect and minimizes conflicts.
Important invoice details to communicate to your clients include:
- Projected budget
- Payment intervals
- Payment methods
- Due dates
- Penalty fees for late payments
You should also mention your return and exchange policy and any applicable product/service warranty. Make sure the client signs the payment agreement and keeps a copy for future reference.
3. Number Your Invoices
Your business invoice system won’t do you any good if you can’t find an invoice quickly. Numbering invoices makes it easier to track how much you’re owed, see which clients have paid, and review client payment history.
Invoicing experts often recommend labeling your first invoice with a higher number. This shows clients that you are an established brand. You can use identifying numbers for different clients e.g. CA5001 for a client whose initials are CA.
4. Brand Your Invoices
Your brand defines your business. It helps share your brand message, values, and legitimizes your business. A branded invoice demonstrates the value you bring to clients.
It’s not enough to insert a logo on your invoices. The colors and fonts also need to be consistent. The appearance of your invoices should match your business website, social media profiles, and any other content to ensure brand consistency.
5. Use Professional Templates
Sometimes clients struggle to identify data on invoices. Be sure to enter all the necessary information clearly so that it’s easy to read to avoid such challenges.
Using an online invoice maker that offers pre-set templates makes it easier to fill in critical information. This makes it easy for clients to identify data on invoices. It also eliminates the need to create a new template every time and allows you to create standard invoices quickly.
Most online invoice makers also make it easier to brand your invoices, making you look professional in the eyes of customers.
Good Small Business Invoicing Equals Better Cash Flow
Getting paid on time is one of the top goals for small businesses. Otherwise, the liquidity of the business suffers. Thus, you need to adopt efficient small business invoicing processes. Consider the invoicing tips above as you bolster your operations to ensure better cash flow.
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