CFO Service Finance & Accounting

16 Tips for Effective Invoicing for Businesses

It’s critical for all companies to get timely payments for the delivery of products/services. A key step in the process of accounts receivable (AR) management, making invoicing streamlined is a key step in helping the organization achieve success. An invoicing system that’s accurate/efficient can make customer payments faster and help companies become more consistent in receiving revenue.

Invoicing Tips for AR Management

• Dispatch Invoices Quickly

It’s important for companies to send invoices quickly after the completion of work or a product/service is delivered. That’s because fast invoicing usually results in fast payments. It also shows your company is professional. Meanwhile, when invoices arrive late it sends the message your company doesn’t care about the collection, which can delay payments. Reminders can help send your invoices in a timelier way.

• Use Blank Space Effectively

If there’s a lot of blank space on your invoice then it’s important to use it effectively. You can use this it to advertise new product/service or share any dates about current offerings. This is an effective cross-selling method that reminds customers you can offer more than what they’ve bought from your company already. It also helps to build customer loyalty. This is important because it’s critical in the process of increasing customer retention rates.

• Send Digital Invoices

It’s important to send digital invoices even when the client prefers printed versions. Send snail mail and email versions to make sure the customer receives the invoices. This makes sure customers get the invoices even when they move their physical address. It also helps with legal issues. When you send invoices through email make the invoice an attachment to the email.

• Relevant Info

It’s important to include key info on the voice including:

• Order number
• Product/service description
• Due date
• Discounts details
• Total payment summary
• GST amount details
• Delivery charges
• Payment options
• Outstanding payment details
• Contact number
• Late payment charges
• Total amount

• Use an Invoice Tracking System

Create a system for tracking invoices. Make sure the financial statements/tax payments are updated. Make sure you have updated details about the customer’s status of payment. An invoice number system can help your company in this area.

• Thank Your Messages

You should include a short thank you message in your voices. IT doesn’t have to be fancy. What’s important is to thank your customer. Contact the customer’s accounting department and inform them you’re selling an invoice for a product/service provided. This provides a human touch and helps to put a face on your company. That can help to encourage faster payments to your company. On the other hand, if making payments I just a digital process it will be less likely you’ll get on-time payments.

• Timely Reminders

Make sure to send timely reminders regarding payment deadlines. This helps to make sure the payment is on time and makes the situations easier for both the buyer/seller. Figure out the best timeline for your company and customers.

• Quality Software

Make sure your company is using quality invoicing software that gives you the ability to make professional invoices with all required info. It should allow for customization in terms of themes/colors. It should also provide different access levels to different users and also include real-time reporting.

• Customer Knowledge

It’s important for companies to have know-how about customers and their business cycle in order to increase the chance of on-time payments. Focus on details like the preferred billing method and payment method. There are various modes of payments including check, online, lump-sum, etc. These key details can help to avoid future arguments.

• Maintain Accurate Records

Prior to sending an invoice business should know which work has been completed and the way it was done. It’s a good idea to do on-going tracking of work through time-management software. You can use time-tracking platforms for hourly billings. Key data related to the invoice must properly be entered into your company’s system.

11. Charge for late payments

Make sure you charge interest for clients who make late payments. This is a serious issue since it’s your right to collect money due. Send a paper and digital reminder regarding late payments. Make sure include tails like interest, the amount due, and tracking number. This ought to be the first step to claim payments prior to taking legal action.

• Several Payment Options

It’s helpful when your company offers multiple payment options for customers. A digital invoice can include a link for making online payments. You can also offer installment payments to make the collection of receivables smoother.

• Billing Schedule

Make a billing schedule then follow it. When companies use consistent invoicing, it helps them plan and shows to customers when they should expect to get the invoice. This helps them make on-time payments. If you can bill recurring invoices every month on the same day. This can help to lower the chance of invoices getting missed.

• Clean/Consistent Format

Follow a clean/consistent format for invoicing. Invoices should be basic, direct, and effective. It should

be easy to comprehend since the majority invoices are read quickly/immediately after customers get them. Data like amount and payment due to date should be clear on the invoicing.

• Share Policies

It’s important for business policies or terms & conditions to be known by the buyer and seller. If that isn’t the case it can result in confusion and arguments. Invoices should have all the terms/policies and should be easy for customers to understand. The invoices should communicate clearly the company’s policies about discounts, late payments, etc.

• Consider Outsourcing Data Entry

You can outsource this invoicing work to Finance and Accounting (F&A) outsourcing company can make sure the task is done right. That includes accuracy and timeliness. This will boost the productivity of your workers. That’s because they can focus their time/energy on critical objectives.

Outsourcing is becoming more popular today as companies sometimes don’t have the resources for completing all their tasks. Inputting data entry can be very time-consuming. Outsourcing the work can make your company more productive and since it can focus on other top priorities.