When you are running an SME, you will be fully aware that business invoicing is an important part of operating your company. It is usually important for a whole host of reasons, such as cash flow.
Furthermore, if your company invoices, you will be acutely aware of the difficulties that can arise when a client delays or refuses to pay, which is one of the reasons why many SMEs use invoice financing companies.
Nevertheless, we have put together our top tips for helping to manage your companies invoices effectively.
We completely understand that it brings no company a great joy to hassle their clients to pay up, but if you are running an SME or have just created a startup, it may be necessary, but the key is to always remain polite.
If you are sending an invoice to another firm, then they should be understanding that delayed payments can be a hassle and potentially harm your cash flow.
When sending polite reminders, try to think about a time frame for them.
Updating your invoice technology
One way to make your life easier when arranging business invoicing is to make sure you have the most up to date accounting software you can afford for your business. Doing so can be an incredibly worthwhile investment, helping to save time and also stress in the long run. Furthermore, good accounting software can help to dramatically streamline the process of sending and receiving payments too.
Provide clarity with your invoices
Another way in which you can make business invoicing easier is to make sure you always provide clarity with them, as it can help make the process far smoother for your clients.
For example, what we mean by this is that you should make sure that the items on the invoice, and the payment required, is always clearly listed. The one thing you don’t want to happen is that your client ends up being frustrated and doesn’t pay the right amount as they are unclear as to the amount they are required to pay you. Therefore, make sure that you have always structured your invoice properly.
That means you should always make sure you included all the necessary details in your invoicing. For example, don’t forget the payment terms, invoice specification, subtotal, vat, total, quantity and unit price, as well as your own banking information. Otherwise, this invoice could just end up in your client’s accounts department instead.
Be prompt with your invoices
Of course, not only should your clients be the ones who pay on time, but you should also be prompt with sending your invoices too. After all, if you are always late with sending invoices, then it will not encourage clients to pay on time either. Make sure you are organised and try to avoid at all costs sending invoices from products months later. It also makes it difficult for you to keep up with unpaid invoices, which will impact on your ability to maintain your cash flow too.
Archive digitally your invoices
Once you have issued the business invoices, it is highly recommended that you archive these invoices digitally. This will make the management of all your invoices far easier, as you will be able to easily retrieve any invoices should you need them (for example an audit, or to resolve a query). This can be a great time saver, especially for small businesses.