Invoicing can be complicated. Whether you are a small business or a large-scale agency or simply work as a freelancer, you know exactly what we are talking about. You may be scrambling around papers and spreadsheets, trying to stay on top of invoices and expenses, e-invoicing regulations, chasing clients and outstanding invoices but still feel like you aren’t reaping tangible benefits.
As it happens, if you are not leveraging the best invoicing practices, you can’t scale your business operations. The only solution is to gain control over your finances by automating your billing processes to save time and money to direct to core business goals.
Luckily for you, here are five habits to incorporate in your routine to uncomplicate your sales invoice procedure for effective management.
Best Practices to Simplify Your Sales Invoice Procedure
1. Go paperless
Even today, there are plenty of companies that rely on paper records to manage sales invoices. While you might still get away with it if you’re just starting out, inefficient sales invoicing procedures are bound to spell disaster down the line.
Given the number of clients, contractors, employees, work orders, account receivables and deliverables small and large businesses are required to keep track of, it is critical that you have a sales invoicing software or an accounting software to monitor sales transactions. It will not just simplify your invoicing procedure and keep your finances organized but also provide managerial advantages. What’s more, with effective sales invoice practices, you can quickly and conveniently access crucial business information from anywhere, as and when required.
You can also capture invoices and store them on the cloud through your accounting software for supporting paper trail.
2. Follow a set schedule
Another tip that can drastically increase convenience and save time when generating sales invoices is if you implement a strict routine for everyone to follow. If you are a small business with a dozen or so clients, a well-thought schedule is just what you need to stay on top of business operations. As per a recent study, nearly $100,000 in revenue is lost every year due to accounting consultants and business teams not tracking time spent on finances.
Your routine should include an effective policy regarding the invoicing and collection process. For instance, you can set your payment due date to be the same for all your clients, say the end of the month. In this manner, any outstanding invoices you need to manage or payment remainders you need to send out can be done simultaneously. A procedural schedule that helps you keep track of sales invoice details will also help align your monthly tasks and reduce the burden of your managerial duties in the long run.
3. Have signed agreements
Whether you are handling the finances for a big or small company, it pays to establish water-tight agreements with your clients so there is clarity regarding the expectations on both sides. This includes getting signed written agreement that outlines the project details, terms of engagement, and payment clauses highlighting when and how payments will be disbursed.
An agreement provides clarity regarding finances as well as gives you leverage to tackle unfavorable situations.
4. Send automated payment reminders
It’s imprudent to operate under the assumption that your clients or customers remember the due date of their payments. Forgetting to pay bills on time is rather common and can happen to the best of us.
In order to avoid chasing your clients for payments at the last moment, send them reminder emails a week before the due date to ensure timely payments.
Don’t wait for the due date of an invoice to remind your customers of pending bills. Past-due intimations, even though necessary, are unpleasant. Therefore, it makes sense to leverage automated payment reminders to inform them of the due date well in advance. You can include details of late payment fees and constructively nudge them to clear dues immediately. By doing so, you will continue to remain in the good books of your customers.
5. Include these essential invoicing elements
You need to maintain a thorough record of sales data if you hope to grow your business. For effective and thorough documentation, you should follow professional invoicing practices when generating sales invoices. This means laying out necessary details in an easy-to-understand and comprehensive manner so there aren’t any hold-ups in payments due to needless indescrepencies.
Here’s a check-list of essential elements to include in your sales invoice:
- Clear Header
- Company Details (Name, address, number, contact info)
- Client’s Contact Details
- Unique Invoice Number
- Invoice Date
- List of services you’ve provided & corresponding fees
- Taxes or Additional Fees, if any
- Total Amount Due
- Payment Terms
- Payment Due Date
Automate sales invoices for accuracy and quick access
By automating and digitizing finance documents, business owners and accounting departments can have instant access to sales invoices that include project orders or proof of delivery. They are in a position to track business finances effortlessly and report their income in a hassle-free manner at the end of the financial year.
Not only will you have your accounts organized but your customers will also feel more confident about doing business with you. With critical financial information and customer support, you can indulge in budget forecasting to upgrade your business offerings and increase your clientele.