Sending an invoice to your clients is an important step in getting paid. No doubt, you understand this. But, often in your haste to send those invoices, you may make some common invoicing mistakes that lead to delays in getting paid.
Considering how critical cash flow is, particularly when you have loan repayments to make and other fixed expenses, these are mistakes you’d rather avoid, right?
Here are 7 common invoicing errors you can easily rectify and avoid:
Mistake #1: Not Promptly Sending Your Invoice
Don’t wait for your customers to ask for the invoice; they’re busy and chances are they’ll forget to remind you. The responsibility is yours.
The sooner you send that invoice, the faster you’ll get paid. So don’t wait for month end. Act promptly once your work is complete!
Mistake #2: Failing to Specify Due Date for Payment
Many business owners make the mistake of sending “open invoices” to clients and include vague, unclear payment terms. Consider these examples:
“Upon receipt,” tells the client that they need to pay the invoice as soon as possible. But, “as soon as possible” is open to interpretation.
“Net 30,” is confusing for those who aren’t business savvy.
“Within X number of days of article completion,” can also be understood differently among clients.
To avoid any confusion, specify the exact payment day. For instance, if you submit your invoice on the 1st of August and want payment within a week, set the payment date for the 8th of August. The ability to customize due dates is a feature that FreshBooks Invoicing provides.
Mistake #3: Not Itemizing Services
While some clients don’t need detailed and itemized service breakdowns, others do. For many customers, it’s a matter of procedure and helps when tracking, recording, and reporting expenses.
Making a habit of providing itemized service breakdowns, regardless of who the client is, is a foolproof way to avoid receiving emails from clients who want this.
For instance, if I wrote a blog post for a client I may include the title, word count and state that it’s a blog post.
Mistake #4: Not Showing Courtesy in Your Invoice
An article on the FreshBooks blog titled, “7 Foolproof Strategies For Getting Invoices Paid on Time,” highlights how showing courtesy in your invoice can increase the percentage of invoices paid on time, by 5%.
Many, however, fail to include phrases like “Thank you for your business,” or “Please pay by [insert date].”
Considering the benefits, why don’t you give it a try?
Mistake #5: Not Following Up
I can’t tell you how many times I’ve sent an invoice, followed up a week later and received an apology and payment the same day.
Some clients forget to pay because they’re busy, and others wait until you badger them (yes, these clients exist). In either case, following up solves problems of late payment.
If you’re someone who dislikes following-up and would rather take the personal element out of it, FreshBooks lets you automatically send customized reminders, so you never feel awkward about following up, again.
Mistake #6: Not Making it Easy to Pay
The clients received your invoice, but there’s one problem: they have no idea how to pay you. Sound familiar? You need to let your client know how to pay you, whether it’s via a bank transfer or through online payment platforms such as Stripe.
Even if you have specified the payment method, ask yourself, “Have I made it easy for my client to pay me?” If the ability to pay isn’t one click away, you should consider changing this.
FreshBooks solves this problem by accepting credit card payments from Visa, Mastercard and Amex. Not only is it convenient for the client, but it speeds up payment.
Mistake #7: Sending an Invoice with Errors
Have you sent an invoice, only to realize that the date is wrong, the invoice number is incorrect, there are spelling mistakes and you haven’t referenced the PO or included information that the client requested?
I’m sure you’ve made at least one of these mistakes, especially when creating invoices in Word or Excel. One solution is to proofread your invoices before sending them to prevent constant back and forth emails.
Alternatively, upgrade to an automated online invoicing system. FreshBooks updates the invoice number as you create invoices and lets you preview invoices before sending them.
FreshBooks Makes Invoicing a Breeze
In addition to the features and benefits mentioned in the post, FreshBooks Invoicing can make invoicing a breeze by helping you:
Impress your clients with customizable invoices
Get paid for work upfront by requesting a deposit
Manage overdue invoices by setting a late fee when invoices become overdue
Save time by automating the invoice schedule and duplicating invoices when you need a similar invoice to the one sent in the past
Reward loyal clients with the ability to set discounts
Cater to your clients' needs with multi-currency billing and multi-language invoices
So, are you ready to improve your invoicing process? Try FreshBooks free for 30 days and see just how easy it is to avoid these mistakes (and experience countless other benefits too!).
About the author:
Nick Darlington is a freelance contributor for the FreshBooks Blog. FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.