Accounting is a very important function which is performed by the organizations throughout the...
A company’s accounts receivable is an integral part of its assets. Most company cash flows are set as accounts receivables from clients and customers. In order to ensure smooth flow of cash, companies, therefore, need to properly issue accurate and precise invoice billings to their clients and customers. Clients and customers receive invoices as a bill for the products and services they avail from a company. These invoices contain details about the items or services sold, the term of payment, payment due dates and other billing information. It is important that these invoices are accurate and precise to avoid confusion, disputes, and delay in payments.
An effective invoice billing is vital to the success of every business, it is important that companies follow also the 10 effective practices for accounts receivable invoice billing. To ensure that the process of accounts receivable invoice billing is kept systematic, organized and working smoothly here are things that companies need to make sure:
Invoices should be able to present information in a clear manner. It should include clear descriptions of the price and amount of the goods and services bought as well as the details about the client and customer name and contact information. The invoice should also clearly show the company’s address and contact information in order for the clients or customers to easily reach out to the company for questions, clarifications, and disputes.
Invoices should contain complete information about the specifics and details of the goods and services bought by clients and customers. Invoices should also show complete information about the company’s address and contact information including phone numbers and email addresses. Having these complete pieces of information will make it easy for clients and customers to contact the company effectively.
Invoices should show information that is clear and easy to understand especially regarding the payment terms and due dates. Most clients and customers get confused with unclear payment terms and invoices need to show this information in a way that it can easily be understood by them. Information regarding payment should be easily understood by clients and customers to avoid complaints, delays in payment and disputes.
Invoices should be properly numbered too so that it would be easy to track them. Companies can make use of combining words and numbers to segregate invoices and properly track them to corresponding clients and customers. Using unique numbering styles can help improve the systematic way of filing of transactions recorded in invoices.
Invoices information need to be accurate and precise and in order to ensure that it should be continuously reviewed every time. Continuous review of invoices can make sure that it will be free from any errors in calculations, grammar, and other issues. Any errors in these fields would confuse the clients and customers and may cause disputes and delay of payments.
Invoices should be designed in a way that it can be easily tracked and traced to a specific transaction. Invoices usually have unique numbers assigned to them. All transaction details should be easily traced and associated with an invoice’s unique number and kept in a record then filed for future references. When invoices are easily tracked and traced it can be updated easily for any changes made.
It is important for invoices to reach their intended recipients properly and effectively. Clients and customers cannot proceed with payment if they do not receive their billed invoices. Companies need to make sure that invoices are dispatched by postal mail and email to make sure that clients and customers do not miss the invoice. When invoices are properly dispatched and delivered, companies
Upon dispatch and mail of billed invoices, companies need to follow-up on them to make sure those clients and customers are aware of the invoice and acknowledge its receipt. It is important to record the acknowledgment of receipts for future reference and updates.
Companies can take advantage of technology today by using invoicing software in creating their invoices. An Invoicing software can make it convenient for companies to prepare invoices can make sure that all the required information is seen on the invoice when using a software program. Online invoicing is also advantageous to use wherein clients and customers will be receiving digital invoices to their email inboxes. Technology today has made it convenient for preparing invoices, saving companies cost, time and effort compared to preparing physical invoices.
Invoices contain not only information about the company but also include the company’s brand of goods and services. The invoice acts as a window for clients and customers to view the company’s business brand and this can be used to the company’s advantage. Companies can prominently place their business logo and other important information onto their invoices.
Making sure that the things above are followed companies can rest assured of a proper accounts receivable billing invoice process to sustain their business. The list above is 10 effective practices for accounts receivable invoice billing that companies can use to make sure that they bill out complete, accurate and precise invoices to their clients and customers.
Some companies see it a challenge to incorporate all these best practices and most of them consider outsourcing the process to accounting firms. Most accounting firms have professional individuals who are expert in the specific field and offer excellent services in maintaining the company’s accounts receivable billing invoice process. By outsourcing this service, companies can focus more on their business operations and worry less about billing out accurate and precise invoices to clients and customers.