You’re in business to make money. Wait, that’s a bit obvious, right?
Sure, but now tell me that your invoice processes are 100%, you don’t have any outstanding payments, all your clients pay on time, every time, and you don’t dread drawing up billing documentation. I bet there was at least one point on this list that applies to you.
The fact is, invoicing processes are one of the most neglected parts of running a business. But if you’re an entrepreneur and your business has yet to grow to a point where an accountant is within your budget, handling the financial admin of your venture is unavoidable.
While invoicing is hardly the most enviable task in the office, it doesn’t have to be the source of stress and frustration. In fact, there are many ways to streamline your invoicing process that are free, accessible, and simple to learn.
So, before you get buried under that pile of invoices you need to send out (or the unpaid ones you’re still waiting for), take a look at this list of 7 tips for small business invoice management.
1. Punctuality Is Professional
Making a professional impression on clients is extremely important for any business. But especially small or new ventures. You’re still in the early phases of establishing relationships with these people or organizations, and making a good impression is very valuable.
Sending out your invoices as soon as an agreement has been reached is one of the simplest and easiest ways to show clients you mean business.
Plus, you get the added benefit of a timely payment. The sooner you send out your invoices, the faster you can get paid, and your reputation will look good throughout. Win-win-win!
2. Establish (and Communicate) Clear Payment Terms
The payment terms on your invoices can be leveraged to your advantage in a variety of ways. They can protect you from scammers, ensure you get paid on time, and afford you more control over the specific details of your project or service outcome.
Let’s break down some of the best payment terms to add:
- Set deadlines – You can add certain deadlines to your invoices so that clients know exactly when to expect delivery, receipts, and more.
- Shorten the payment window – Give your clients a small window for making the total payment. This can speed up the process and incentivize them to pay promptly.
- Use polite terms – Invoices that include polite words such as “please” and “thank you” are 5% more likely to get paid on time. It pays to be nice!
There are lots of different ways you can use payment terms to take control of your invoicing system. Remember, it’s your business and your invoice. As long as you are being fair and reasonable, the terms under which payments are made are up to you.
3. Go Electronic
If you want to really upgrade your invoice processing system, you’ve got to go electronic. There is a wealth of professional electronic invoicing tools that will create, process, screen, and send out great-looking professional invoices on your behalf, often for free or at a relatively low cost per month.
This will not only mean you save significant time and energy working on invoices, but you will also have access to a wide range of invoice templates that have been created by highly skilled designers. No more second-guessing your invoice design skills—hand the baton over to the pros.
4. Diversify Your Payment Options
One of the best things you can do to streamline your invoicing process is to make it as easy as possible for clients to pay you. And the best way to do that is not to limit their payment options. Instead of just offering the standard bank transfer, credit, or PayPal, diversify your options so that anyone can pay fast.
In 2023, some of the most popular payment methods (in addition to the above-listed ones) also include cryptocurrency and:
- Apple Pay
- Google Pay
- QR codes
- Samsung Pay
It’s not really necessary to add all these payment options to your invoices. But offering more than three is a good way to show clients that you’re willing to accommodate multiple types of payment methods to make their lives easier. Find out which ones are popular with your client base and add them.
5. Add A Penalty For Late Payments
Unfortunately, late and unpaid payments are rife amongst the small business community. But this doesn’t have to be the fate of your small business.
You can inspire timely (or even early) payments by adding a penalty or interest to your payment terms. For example, you could stipulate that for every week that passes the post-payment date, the total amount owed increases by 1-2%.
6. Incentivize Early Payments With A Discount
If you’d like to take a more optimistic approach to prevent late payments, perhaps rewarding early ones is more up your business’s alley. You can incentivize clients to pay you on time by offering a small discount for early payments. Even a nominal amount like 1-2% can be enough incentive.
7. Add Your Logo For Extra Brand Awareness
Creating brand awareness is crucial for all businesses. But when it comes to small businesses that are still getting their foot in the market, it becomes even more crucial.
You can amplify brand visibility by adding your logo to your invoices. This serves as a visual reminder of who your clients are working with and makes a stronger impression on anyone who views the document. Don’t miss out on an opportunity to showcase your brand and what it’s all about.
Regardless of whether you’re using a printable invoice template or one that’s viewed electronically, don’t forget to check that your logo is crisp and clear. The last thing you want is a fuzzy, pixelated image that only brings down the visual appeal of your brand.
Kickstart Your Invoicing Process
Invoice management might not be an inherently fun task, but it doesn’t have to be a drain on your resources or your energy levels. Small business owners often have to innovate new ways of doing things, and invoicing should be no different.
If something isn’t working, that’s a sign there’s room for improvement. With these useful tips for speeding up and refining your invoice process, you can kickstart your small business into a higher gear.
