Partner Article

Common invoice mistakes and how to avoid them

At Commercial Domestic Investigations, we understand that paperwork can be time-consuming, and let’s be honest, a little tedious. Unfortunately, it is also necessary to run a successful business. One of the most important aspects of paperwork is invoicing.

By avoiding the common pitfalls of invoicing you can save your business a lot of time and expense.

Get a contract

Gone are the days where a verbal agreement is enough to ensure that you get paid. To prevent your business from getting left with an unpaid invoice, get a signed contract from all your clients.

Having a contract means that there is no room for confusion, all the details are clearly laid out for the customers to see.

Include the payment due date

Many businesses will include payment terms on an invoice, for example “30 days” but to avoid further delays, include the specific date that the payment is due, this makes it as clear as possible to the client that you are expecting a payment by that specific date. Not including a due date can delay your payment by days, weeks, maybe even months.

Give the payment options

Clearly detail all the ways that a client can pay. Encourage clients to set up a direct debit or standing order payments if the invoice is recurring. Bank transfer is the quickest way to get paid, so ensure that you include all the necessary bank details. A customer will not chase you for your details so to make sure you receive a payment, include all payment details.

Send invoices regularly

Clearly, the longer that you take to create and send an invoice, the longer it takes to get paid. Send your invoices regularly at the beginning or end of each month, this makes it easier for long-term or repeat customers to plan for your invoice.

Give specifics

Your customer probably receives several invoices every month, they may not remember the details of the product or service that you provided. List the details so the customer knows exactly what you are charging them for. If a purchase order number has been discussed, then include it on the invoice. By including this information, the client is more likely to remember the work that you have done and pay the invoice.

Invoice numbers

Numbering your invoices is considered best practice, it allows you to track and trace individual invoices and locate which ones have been paid or not.

Discounts

Including a discount for customers to encourage prompt payment increases your chances of getting paid on time, alternatively you can offer a discount to repeat customers. There is a lot to consider before offering your clients a discount.

Use a header

By using a header that includes your business logo, your customer knows exactly who the invoice is from. Include all your contact details so that the payment can process quickly.

Interest fees

It is your businesses decision on charging interest. Be clear on how much interest will be charged and when it will be applied. This can convince customers to pay in a timely manner and makes it clear to those that don’t, that interest will be applied.

Marketing tools

Invoices don’t just have to be a way to track payments, by using previous purchase history you can see what your customers might need in the future, allowing you to alter your marketing strategy.

Be polite

When chasing payments, the difference between keeping and losing customers can be as simple as a tone of voice. Payment chasing can be frustrating but that is not a reason to treat your customers poorly. You can still be assertive whilst remaining polite and professional.

This was posted in Bdaily's Members' News section by Steve Hall .