Getting paid as quickly as possible is understandably a priority for most small business owners. Multiple late payments can result in disruptive cash flow issues further down the line, not to mention the extra time it takes to follow up with clients and remind them that they need to pay you. But resolving this issue often feels like a losing battle, especially if some clients continuously fail to get your funds over to you on time. Fortunately, there are ways you can effectively address the problem, starting with the way you create invoices.
If your invoices are complicated and difficult to understand, then you may have discovered your problem. There’s an art to creating the perfect invoice and it’s often quite simple to perfect. To get started, take a look at the five tips in this blog and revolutionise the way you get paid on a regular basis.
Creating invoices doesn’t have to be a time-consuming, arduous task. In fact, it can be instant and automatic when using the right software. Invoicing software helps you to quickly put together a professional-looking invoice by giving you a wide range of templates to choose from. Easily customise the layout and allow the software to generate them on-demand once you’re satisfied with the design. But it’s not just the way an invoice looks that’s important; the numbers need to be accurate as well.
A VAT calculator helps you to ensure that the VAT you are charging your clients is correct, reducing the number of questions you have to answer before receiving your payment. As a VAT invoice needs to have a certain level of detail to comply with regulations, any mistakes can impact both your bookkeeping records and your client’s ability to pay.
Most clients will review invoices before making a payment, which means you can’t simply send them an e-mail detailing the total they owe and no further information. Your invoices should adequately describe all of the products and services they’re being charged for so that it’s clear how the total has been calculated. This doesn’t mean you have to include a lengthy description, it’s enough to write a few words such as ‘project fee’ or ‘delivery’ so that clients don’t have to follow up to make sure they’re not paying for something they didn’t receive.
One of the most common details that small business owners forget to include on their invoices is payment terms. If you aren’t already aware, payment terms are essentially a list of instructions that inform the client how they can make a payment, when they need to pay by, and whether there will be a fee for missing the payment deadline. You may also need to include your returns policy here if relevant. Failing to include this information may mean that a client sends you a cheque when you only accept cards or bank transfers, slowing down the entire payment process. And don’t forget, if you never informed a client of the payment deadline, they’re more than likely to miss it.
If you’ve decided to handle the design aspect of your invoice, it’s important to keep things simple. All you need your client to pay attention to are the numbers and payment terms, so avoid distracting them with bright colours, logos and cursive fonts. While it’s perfectly acceptable to include colour and a brand logo, keep it as understated as possible for a more professional appearance. Your invoice layout isn’t nearly as important as the way all your marketing materials look, so focus your creative efforts on these and adopt a more minimalistic approach when it comes to invoices.
No matter how well-presented your invoice is, some clients will always have questions or need certain figures clarifying. In these cases, it’s best to have your contact details to hand so they can get in touch as soon as possible. Contact information usually consists of your business address, e-mail and phone number, but if there are other ways for clients to get in touch with you, include them to make it as easy as possible.
Get paid faster today
Changing the way you approach invoices can have a big impact on the efficiency of your payment process. Begin your journey today by finding an invoice template that works for you and investing in professional-quality software.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.