Invoices are the backbone of many small businesses; it’s a key tool in tracking income and expenses. It’s also a tool to build a sense of professionalism with your clients. For these reasons, it’s important for small business owners to take some time to set up an invoicing system up front that meets their business needs. If you are looking for the right way to invoice for your small business, here are some tips to do it like a pro.
Make Invoicing Easy
Finding time to complete your invoices isn’t always easy, especially when you’re busy growing your business. An invoicing system that works with your smartphone or tablet lets you complete your invoices on the go or when you find a few spare minutes during your busy day. It also makes it easy to invoice as soon as the work is complete. Discover more information about online accounting software suitable for mobile devices to make invoicing work for you and your business.
Capture All Your Work
If your business generates income based on billable hours or completed tasks and projects, you need an invoicing system that can capture and track all these elements to ensure you get paid for the work that you do. It’s also important to consider whether you need to track hours for multiple people in your organization on a single project. If you don’t accurately capture and invoice your billable work, you’re leaving money on the table.
Make Your Invoice Stand Out
Include your company logo and colors so your clients can recognize your invoices from others. Prominently feature terms, amount due, and payment options, as well as any past-due amounts from previous invoices. To increase the chances you get paid quickly, choose a carrot or stick approach. Some businesses offer a 2% discount if payment is made within 10 days; others charge a 5% penalty for payments after 30 days. Would one of those approaches work with your business type and clients?
Invoice the Right Person
Your contact person at your customer’s office may not be the one who is responsible for paying the bills. Find out up front the name of the person who pays your bills when you set up a customer account or new project in your accounting software.
Give Your Customers Payment Options
For many businesses, cutting a check is falling out of favor as the preferred way to pay bills. If you want to increase your collections, give your customers the option of paying with a credit card, either in person or online. Some small businesses find that accepting electronic checks increases their collections.
Automate the Follow-up
Look for invoicing solutions that let you customize and automate your invoice follow-up. Maybe you’re offering a 2% early payment discount. Would you like to send a reminder to your clients that the deadline for the discount is approaching? Maybe you’d like to notify clients when their account is past due and prompt them to enter a credit card number.
To learn more about invoicing systems and how to choose the right one, talk to your accountant or a mentor at the U.S. Small Business Administration.
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