In many service-driven industries, getting paid is one of the most time-consuming aspects of the work. From crafting your initial prices and negotiating discounts, to pursuing late or missing payments, the challenges are worth meeting head-on.
A little upfront investment of time and effort goes a long way to trim down the time it takes to get paid, and it all starts with your invoicing process.
The invoice is, as you know, the bill you send to your client to receive payment. In a perfect world, even the simplest, most bare-bones invoice would be paid correctly and quickly, but in practice, having excellent invoicing actually makes a difference in your company's cash flow.
When invoices are inconsistent or look sloppy, the client can become genuinely confused about the costs or simply see you as unprofessional and harder to trust. If the invoice isn't attuned to the process you agreed with - timing, information included, etc. - your payment could be delayed or you could simply not be paid at all.
Addressing these pain points is key even when your personal focus in the business isn't on the accounting side: you need reliable payments from clients to keep your agency open! Here's how to make sure your client invoicing is bulletproof and gives both parties everything they need.
The process of creating a great invoicing standard practice starts before you even commit to a particular client, but starting early is how you can set the right expectations throughout the process.
Every service industry has some form of contract expectation, and one way to start on the right footing with any client is to use a very detailed contract that outlines the relationship between you and the client. One feature to include should be your invoicing procedures, including:
The specific answers to these questions are less important than the fact that both you and your client know what they are.
If you assume that payments will come within 30 days and your client is allowed to believe they can pay whenever they wish, no late fees, you are setting yourself up for disagreements and discord down the road.
Standardizing your invoicing also saves your company time remembering who is the exception to the rule, especially if most clients are happy with your standard practice.
Let's face it: it's easier to get paid if your clients can use their own preferred payment option to get the payment into your hands.
Depending on your client, you may want a variety of easy online payment systems as well as a willingness to take checks through the mail, so that you can fit easily into their accounting office's method of doing things. Setting up payment options takes time, but once you have them, they start saving you time.
Once the work is in progress or completed and an invoice is needed, stick to the schedule you set out, even if it means making an appointment to send those invoices on a given day in your calendar. Automating parts of the process takes some of the guesswork out of it and keeps you looking incredibly reliable.
Even if some clients don't mind a stripped-down, simple invoice, give as much information on every invoice as you can. This doesn't mean piles of text.
At the minimum, include all of the contact information for your company and for the invoicing contact, detailed description of the work completed and why the amount is being invoiced (especially if it will be different from expected), and available methods and modes of payment.
If you've ever had issues with accuracy, plan a double-check into the process of invoicing, since delays often happen because of small typos and errors.
Once the invoice is paid, mark it as such and keep track over time. Accelo can help you keep a better track on how a project's utilization is going - every invoice affects the remaining budget for the project, and you don't want to end up invoicing for too much without talking to your contacts.
Maintaining a searchable and clear database of past invoices is good for accounting but is also great for ongoing client relationships.
If you notice that you had invoices every February for a given client but haven't heard from them lately for further work, it can be a nudge to reach out and potentially get more work right at the time that they need you.
When clients aren't paying your invoice on time, the best first assumption is that something has gone wrong that is no one's fault or an error on your side. You don't want to have an angry client, so focus on transparency.
Have a discussion with your client and remind them of the procedures in your contract. Be willing to listen if they are having cash flow issues or have another explanation. If they don't pay a partial payment, it is reasonable to request a halt in the project until the payment is issued, so you don't end up spending more time on a project for which you will not be paid.
Still, being flexible for a client with a positive track record of paying you can be valuable, so focus on solutions that balance your need for cash flow and the value of being flexible with a good client.
It's easier to conduct consistent, accurate invoicing when you have a platform to organize your business expenses and income.
Accelo integrates with a variety of other platforms to make it easy to share data between systems and keep every program up to date, all while making sure your utilization is strong and that every project is getting paid for in a timely manner.
Ready to automate elements of invoicing and improve your understanding of where your business stands? Try a free trial of Accelo today!