39 percent of invoices in the United States are not paid on time.
As a business owner, you know how damaging late payments can beThey can disrupt your cash flows and even bring your operations to a haltAlthough it can be argued that businesses have little control over whether a client will honor an invoice on time, there are business invoicing steps you can take to reduce the chances of late invoice payments.
In this article, we’re sharing a couple of invoicing and billing best practices you should observe in your business.
Let’s get into it.
Do Away with Paper Invoices
Even in a world that’s increasingly becoming digital, about 80 percent of businesses still use paper checksNow, we’re not saying paper checks aren’t efficientThey certainly get the job done, but if you’re looking to get paid faster, it’s high time you embraced paper invoices.
Preparing a paper invoice is time-consumingSomeone has to manually enter the detailsThen, the invoice has to be mailed to the clientWith this in mind, it’s not surprising to learn that only 14 percent of paper invoices are filed the same day they’re received.
Electronic invoices are faster and the high error rate is reducedThere are different types of invoicing software you can use to automate the process and ensure faster issuance.
Don’t Forget Key Details
If your business prepared tens or even hundreds of invoices every day, it’s understandable that you just want to capture the key details, namely, the descriptions of the items sold, the amount the client is to pay, and the payment details.
But those aren’t the only key details that should be on your invoiceYour business name, address, and contact details are just as importantCan you imagine your client going through your invoice only to find out that they can’t even tell who sent it?
That being said, it’s crucial to maintain a consistent theme and style in your invoicesIf you’re always changing invoice designs, it can be difficult for your clients to memorize your brandCheck out this template for an invoice if you’re looking for a design that will work for your business.
Consider Offering Early Settlement Discounts
It can be frustrating when your clients habitually make late payments even when you send the invoices promptlyWhile some clients might be unable to pay on time because of their own financial challenges, so simply don’t feel the need to pay on time, especially when they have nothing to lose.
Consider offering early settlement discountsEveryone loves a discount, so some of your clients might just jump on the offerJust ensure that the discount rate your offering isn’t eating too much into your profits.
Business Invoicing Tips for Faster Payments
Business invoicing is an indispensable functionIt’s in the best interest of your business to embrace these invoicing tips and best practicesYou’re bound to see a difference in your cash flows.
Explore our blog for more small business best practices.