There’s a lot of elements to running a business that you can’t control, and you may think that how quickly you get paid is one of them. It’s up to the customer, right? That may be true to an extent, but there are a number of ways you can optimize your billing process at every step of the way, and ultimately gain more control over your cash flow.
Cash flow, the actual cash that goes in and out of your business, is the single most important indicator of whether or not you stay afloat. According to a U.S. Bank study, 82 percent of business failures are due to poor cash management. It’s unfortunately one of the main things keeping small business owners up at night.
Here are 6 great ways to make sure your invoices are working for you every step of the way:
Itemize, don’t generalize
An invoice can be a really powerful tool for getting paid quickly, as long as it’s easy to understand. Avoid grouping details together, and spell out even the smallest of details as separate line items so there is no room for confusion. For example, separating labor and parts, and itemizing within those categories i.e. design fees and installation should be itemized within labor.
If you’re in doubt about how much detail to include, always err on the side of clarity and over-disclosing. You’ll never have someone hold up payment because there was too much detail on the invoice.
Get payment terms out in the open
You can minimize the back and forth at the end of a project by eliminating confusion up front. Use short, clear, simple wording like “days to pay” instead of “net.” Discuss your payment terms when you review other contract details, such as deadlines, so you can answer any questions or objections your customer has before you get started.
Attach quality visuals
It’s so easy to snap and share high quality images these days, and many people expect it. Take advantage of the ability to attach photos to your Invoices, and show off your work in-progress or the finished product.
Attach photos of receipts for anything you paid for along the way. This is not only good practice for building trust, but it removes one more bottleneck that may cause payment delay. Eliminate the areas your client may need clarification on before they pay the bill.
Make it easy to pay
According to the Federal Reserve’s Cash Product Office, 65% of people would rather pay by debit or credit card than any other form of payment. And we all know business owners would rather not wait for a check in the mail.
By accepting online payments, small businesses are creating an easier way for customers to pay on the spot, and, as a result, see that money deposited in their bank account faster.
Invoice2go allows business owners to add a “Pay Now” button to their invoices, which gives their customers an easy way to pay online. And now that we support Apple Pay, your customers will able to pay their invoices with the touch of a thumb. Do what you can to remove barriers; even the smallest hiccup can delay payment for days, if not weeks. Learn how to start using the mobile payments feature here.
Send your invoice right when the job is done
Timing is everything in business. The best time to send an invoice is right when you finish the job, when the work is still fresh on your client’s mind. You’ll have a better chance of having all the right details on hand, and it will limit the back and forth that ultimately gets in the way of being paid. Better yet, if you can deliver the invoice on the spot, you can spend time with your customer to review the details and make sure you’re on the same page.
Set up automatic payment reminders
A little reminder can go a long way in making sure you get paid, but manually calling, texting, or emailing be painful. Take the work out of following up by setting up automatic reminders within Invoice2go. Just set your ideal timeframe (i.e. on the due date, three days before the invoice is due, etc.) and Invoice2go will send a friendly reminder for you. The Payment Reminder feature is available to all business owners on our Pro, Enterprise or Unlimited plan. You can upgrade here to access this feature.