11 Steps to Getting Your Invoices Paid Faster
- June 7, 2017
- Posted by: Quarles Business and Financial Strategists
- Category: Xero Accounting
11 Steps To Getting Your Invoices Paid Faster
Invoicing is a vital part of running a business. Without accurate and timely invoicing your cash flow will suffer. So make sure you get it right by following the steps below.
Invoicing – More Than Just A Request For Payment
An invoice isn’t just a request or demand for payment for goods or services. It’s also a contact point with your customers. If you invoice well, you’ll get paid faster. But you’ll also build up a better relationship with your clients.
- Keep your invoices and other financial data safe using online applications
Cloud accounting software stores your data securely on remote servers. This keeps your invoices and other financial information safe from loss. It helps protect your business against fire, flooding, earthquakes and other disasters. Learn more about cloud accounting software here “What is the cloud and should you be using it”
- Agree on payment dates and amounts with your customers in advance
A written Statement of Work is a good way to ensure there are no misunderstandings. You can provide estimates or quotations in advance for the goods or services you provide. Xero accounting software can convert your quotes into invoices.
- Invoice for everything – don’t let anything fall through the gaps
You need to be thorough and invoice for all your costs. It’s OK to give away freebies like minor expenses to generate goodwill. But do it sparingly, as your customers might expect the same treatment next time.
- Let your Xero accounting software do the hard work preparing invoices
Xero accounting software will generate invoices for you quickly and easily. It will include all the expenses you incurred when working for a particular client. This means you’ll always recoup your costs when you invoice.
- Ensure your invoices are comprehensive and itemised, with all the necessary details
If you want your invoices to be paid quickly you need more than just your company name and the total amount due. Be sure to include:
- Your business contact information, including name, address, email, and phone.
- Any legally required information, like ABNs or company numbers.
- Your client’s name and contact information. Make sure you address it to the correct person in their organisation.
- A list of the services or goods provided and the prices for each. Use clear descriptions, so there are no misunderstandings.
- The quantity of each service or item purchased, then a column of sub-totals.
- The date of invoice.
- A unique invoice number. Your accounting software can generate this for you.
- Your client’s purchase order or sales order number (if they’ve supplied one).
- If you are invoicing a foreign company, indicate which currency you want to be paid in.
- Your bank details for direct deposits. This needs to include your bank’s name and address, account number, and other codes.
- Any other methods of payment you offer, like PayPal or credit cards. Be sure to account for transaction fees, so you don’t lose out.
- Your payment terms, such as 14 days from the date of invoice. Make sure you include the date due as well, so they don’t need to work it out. People typically pay two weeks later than required by the payment terms. So make the term shorter to compensate.
A request that direct payments include references, like your invoice number. Then you’ll know who has paid.
- Every invoice is a branding opportunity, so use a good design and add your company logo
Spend some time finding an invoice template that shows your business at its best. Choose Xero accounting software with customisable invoice templates to help you do this easily.
- Send your invoices as soon as the work has been completed
For healthy cash flow, invoice as soon as you can. Every day you wait for means another day before you get paid. If you’re on a retainer, it’s a good idea to invoice on the last Monday of the month.
- Set reminder alerts to notify your customers that payment is due
Your Xero accounting software can warn you when invoices are overdue. It can also warn when they’re nearly due. Some cloud accounting software notifies your clients that their payment is due, which can save you a lot of work chasing late payers.
- Talk to late payers politely, but be prepared to act decisively if necessary
Cash flow is the lifeline of your business. So if reminders have been ignored, pick up the phone and talk to your client in a friendly and constructive way. If they persistently fail to pay on time, you might need to consider dropping them as clients.
- Build invoicing into your business workflow using add-on applications
There are more benefits to online invoicing software than just issuing invoices. It can tie in with project management tools, inventory solutions and POS (Point of Sale) software. And all of this helps you improve your workflow.
- Consider outsourcing invoice management to your tax Accountants Perth
If you don’t have time to manage invoicing yourself, outsourcing can be a good option. With Xero accounting software, you can give secure selective access to your bookkeeper or accountants in Perth. You can still see every transaction at a glance.
Invoicing is one of the most important aspects of running your business. So take the time to get it right by following these 11 steps. Your cash flow will be much healthier as a result. Want some more tips on how to improve your businesses finances? Give us a call at Quarles Business Advisors and Accountants Perth to learn how to get your invoices paid faster.