Every business owner loves to be paid, but when it comes to creating invoices, then they tend to be intimidated out of tension. It is because they find it tedious, complicated, and problematic, thus giving it less attention. However, after some time, they realize the crucial role it plays in the cash flow into their business.
Only knowing the importance of sending invoices is not sufficient. It looks very unprofessional, colorless, and incomplete when you send an invoice filled with only about the amount of information to be paid.
The purpose of an invoice is nothing more than being a mini-copy of what you have done or given to your customers/clients, and the money they owe for that.
So, you are provided with 20 invoicing issues hampering your small business growth in this article that must be avoided, most businessmen don’t even realize them. Keep reading below to know more:
20 invoicing mistakes to avoid for your Small Business Growth:
- Forgetting to invoice
Forgetting to invoice is not less than landing in a pothole. Invoicing is one of the prime needs of your business. But, most people like you forget it quite often due to being busy.
You must receive payments on time for the services or goods you provided. The way your clients keep asking you for timely delivery, the same you must remind them of the payments they owe: there is nothing wrong with it.
It’s wise to send invoices in time to ward off any further miscommunication overpayments and have a positive cash flow into the business.
2. Delays in the invoicing process
The ideal time to send an invoice is right after providing your services or goods to your clients. It is because you have invested your money, time, and effort into the project, and it is your right to get returns on the completion of the task.
Many businesses are financially strong enough to survive without receiving payments on time, but not every business, especially a newly-established one. It’s wise to fix ROI as soon as possible and keep your cash flow healthy.
3. Not paying attention to unpaid invoices
It usually happens that you send an invoice with the expectation of receiving payments on time and keep waiting for them. You must set a date and follow up in the case of payment delays.
Sometimes, clients are too busy to pay attention to your invoices. But, if you keep reminding them with an automated payment reminder after a certain period of time, then you will receive payments on time.
You must contact your clients on having an issue, and if they are still indifferent, then you must take any action for that.
4. Confusing business terms and conditions
Take you every step professionally. Never use vague language and terms while organizing your business terms and conditions.
Terms and conditions must be clear to avoid any miscommunication that may arise in the future. Your invoice must include the following to get paid in time:
- Item descriptions
- Date
- Prices
- Quantities
- Payment details
- Due dates
- Terms and conditions
- Company details
- Authorized signatory
5. Not knowing the importance of a signed contract
These days, businesses face unexpected economic and environmental changes, so setting up terms and conditions once may or may not work. Therefore, it’s better to set up terms and conditions beforehand.
You must have a signed contract to save yourself from any fraud. Having a simple contract signed by your clients will save both of you from such issues, thus increasing the credibility of your business.
6. Not invoicing the right person
The person who gets your deliveries may not be the right person to send an invoice. Your clients could have a different department to manage finances.
And, you are adding another person to your process without any reason. Doing so, you are not only delaying your process, but you are also leaving an unprofessional impression of your business upon your clients.
7. Sending incorrect or incomplete invoices
When you send an incorrect or incomplete invoice, you spoil your brand image. Such issues may give birth to miscommunication and the wastage of time. So, it’s wise to use an online invoice software system.
The online available invoicing software for small businesses helps you create error-free invoices. It reminds you of adding the following given below to your invoice:
- Proper address
- Company name
- Client information
- Invoice number
- Due date
- Tax numbers
- Product/service quantity details
- Price
- Mode of payments
8. Being unable to itemize
In simple words, itemization is the inclusion of a detailed explanation of every charge. Itemizing your invoice way is dependent on your business, but it is an important part of invoicing.
It gives your clients a clear idea of what they are paying for, thus helping you receive payments on time.
9. Not numbering the invoice
When you give your invoice a number, it becomes very easy for you to track it. You can track each invoice status like which invoice is paid, which one is received, and the ones having crossed the due date.
The points given above become easy when you go for a small business billing software system.
10. Not knowing the value of invoice backup in the cloud
Just imagine if your laptop gets crashed, and you are left with all your data lost, then you don’t have anything to do but regret.
Don’t be terrified by such a frightening thought, as you can choose the best small business invoice software system and have all your information saved in the cloud.
Such advanced invoice software systems are automatic, super-fast, and trustworthy. If any crisis comes up, you can have such lost information retrieved easily. Moreover, you can access the data from anywhere and anyhow without having your files with you all the time.
11. Confusing fees for deliveries
No one wants to pay for the things they don’t have an idea of. So, it’s wise to avoid any confusion in fees. It may spoil your professional relationship.
You’d better explain each charge to your clients clearly before starting any project, it’s best to keep your communications transparent.
12. Forgetting to add late fees
Make your payment rules and follow them strictly. You’d better add late fees for the payments that cross the due date so that you can make your clients pay you on time.
You should keep sending them notifications to remind them of the consequences that they may have to experience if not paying on time.
13. Not offering early payment discounts and offers
Encourage your clients to pay you early and offer them tempting payment discounts. They could be gift cards, credits, and so on.
14. Issues in invoice formatting or editing
If you send invoices to your clients with grammatical mistakes, spelling errors, and varied formatting, then you are spoiling the reputation of your business. Moreover, it can also be a reason for your late payment, thus negatively affecting your entire cash flow.
You must check each and every part of your invoice properly. To make look more professional and authentic, you should opt for online invoicing software to ward off such issues.
15. Limited payment options
The finest way to retain your customers is to allow them to pay online, as it helps them save their effort and valuable time. More payment options make it easier for your clients to pay, and sometimes, they pay early in quest of discounts and offers. The best part about online payment is that all is done within 5 to 10 minutes.
You should be aware of the fact that advanced invoicing software like Invoicera is integrated with above 30 payment gateways allowing you to get payments in any currency from all over the world in a short while.
16. Unbranded invoices
It will be very interesting for you to know that adding a logo can help you receive payments 3 times faster. It is because the logo shows your company as a well-reputed brand and sets you apart from others.
Apart from logos, you must make use of fonts, colors, and templates to indicate the authenticity of your brand.
17. Not using invoices as a marketing tool
The main purpose of an invoice is to help you receive your payments, but you can use it as a marketing tool to boost your revenue.
While sending invoices, you must attach flyers and offers to allow your customers to use them in the future. By doing so, you can market your business much better and make it possible for your clients to stay subscribed to you for a long time.
18. low-standard business ethics
Politeness is an integral part of professional ethics. Use of small words like please, thank you, and sorry can boost your chances of receiving payments on time 5 times. Moreover, it also plays a vital role in maintaining healthy and sweet relationships with your clients.
Such words will always bring a smile upon the face of your clients, thus making your relations free from any grudge or anger.
19. Too long terms of payment
Giving your clients too much time to pay can negatively affect your cash flow process. Let’s have an example: if you give your customer 45 days to pay, and they pay you two weeks after the due date, then it means that you received the payment two months later.
It’s normal to give your customer 30 days to pay you. It’s wise to have an idea of the industry standards and then make your own payment terms.
20. Paying no attention to your customers’ payment cycles
If you don’t know about your client’s payment cycle, you are missing something very important and serious. It’s wise to keep track of it, as it directly affects your cash flow.
You will receive payments on time if you bill your clients before their payment cycles. It is because your sent invoice will get their attention. On the other hand, invoices sent later can force you to wait for some more days.
Conclusion
The 20 invoicing issues given in the blog can be sorted with the useful tips given, thus making it possible for you to leave your competitors behind.
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