Invoicing is an essential part of any business, yet it can be tricky to get right. Invoice properly and you could see a dramatic increase in your cash flow; invoice improperly and you could find yourself out of pocket with little to show for it!
In this blog post, we’ll look at why invoicing is so important, and go through step by step how to do it properly. We’ll also take a look at what to do if an invoice goes overdue, and how to protect your business against bad debt.
Why invoices are important
Invoices are essentially IOUs, they document what was sold, to whom, and for how much. They act as a record of what a customer owes you, and they form the basis of your business credit control. Without invoicing, it would be very difficult to keep track of who owes you what – and that’s why proper invoice management is so important!
Invoices also provide valuable information about your customers and their spending habits. By keeping track of invoices, you can get a better understanding of who your best customers are, and what kind of products or services they’re most interested in. This information can be used to inform your marketing and sales strategies, helping you to focus your efforts on the right people.
Why invoicing properly is just as important!
While it’s important to invoice in the first place, it’s just as important to invoice properly. That means using clear and concise language and making sure that all the necessary information is included.
When invoicing properly, you ensure that both you and your customer have a clear understanding of the transaction. This can help avoid any misunderstandings or disputes further down the line!
How to invoice properly
Now that we’ve looked at why invoice management is so important, let’s take a look at how to do it properly. Here are four simple steps to follow:
– Step one: create a professional invoice template
This is the first and arguably most important step in invoice management. Your invoice should be clear, concise, and easy to understand. It should also include all the necessary information; such as your business name and contact details, the invoice date, the due date, and a detailed breakdown of what was purchased.
– Step two: send invoices promptly
Once you’ve created your invoice template, it’s important to get into the habit of sending invoices out promptly. This will help you get paid faster, and it will also give your customers a clear understanding of what they owe and when it’s due.
If possible, try to send invoices as soon as the transaction has taken place. If that’s not possible, aim to send them within 24 hours. Also, if you’re really struggling to stay on top of things, consider using invoice financing to free up some cash flow.
– Step three: follow up on overdue invoices
If an invoice is overdue, don’t be afraid to follow up! This can be done via email, phone, or even in person – whatever you feel is most appropriate.
When following up, it’s important to be polite but firm. Remember, you’re not chasing the money, you’re chasing the invoice. If a customer is having difficulty paying, see if there’s anything you can do to help; such as offering a payment plan.
– Step four: protect your business against bad debt
Unfortunately, there will always be a risk of bad debt – no matter how well you manage your invoices. That’s why it’s important to protect your business against it, by having a clear credit policy in place.
Your credit policy should outline when and how you grant credit; as well as what action you’ll take if an invoice is not paid on time. By having this in place, you’ll minimise the risk of bad debt and ensure that your business is always running smoothly.
Business Credit Control Support
By following these four simple steps, you can invoice properly – and enjoy all the benefits that come with it! From improved cash flow to better customer relationships, proper invoice management really is essential for any business.
If you’re still chasing outstanding invoices, reach out to a member of our team today. No Collection, No Fee, we provide a fully comprehensive debt collection service that uses the most advanced techniques to trace debtors and recover money owed.
Get in touch to discover how we can help get back what is rightly owed to you!