As a business, you are sure to follow strict schedules for all your business transactions: from when to deliver to your customers to when to pay your bills and employees’ salaries, as well as when to send out your invoices. And when it comes to sending out invoices, you want to make sure that this is done according to a strict schedule as well, so as not to disrupt your cashflow and your daily operational expense needs.
But when sending out invoices, aside from making sure that all the relevant details are included (such as your customers’ exact business name, their address, the product quantity, number, and price, the payment terms, and so on) there are also other ways to ensure that your invoices are paid on time and that you do not fall victim to disputes or questions.
Following are a few top tips for improving your invoicing process, thereby avoiding cashflow issues arising from improper or incomplete invoicing:
What constitutes a proper invoice?
You have to know what should really be included in your invoice, especially when you have a finicky customer who requires additional details. Your invoice should include not only standard details such as your customer’s name and address and their delivery address as well as the date and method of delivery, but other details such as how the customer should make their payment, including bank account details, as well as a reference or invoice number for the invoice and your payment terms and due dates.
Your invoices should also be completely compliant with the requirements of HMRC if you are a VAT-registered company.
A proper process of sending out invoices
You should also make it a point to send out your invoices as promptly as you can. Have a dedicated staff member take care of this, and tell them to send out the invoice as soon as the goods or services have been supplied. This way, there is less of a chance for late payments from the customer. Also, it is a good idea to enhance your invoicing process by making use of a tried and tested system of accounting along with dedicated software which will make the entire process easier to track and lessen the likelihood of mistakes.
A proper process of resolving disputes
In addition to a proper accounting and invoicing process that includes specialised software, it is also a good idea to have a specific process in place for dealing with questions or disputes with your invoices. This process should be designed to address disputes quickly, so it will not affect your cashflow needs.
A good invoice dispute resolution process for your company should also include logging the details of any dispute as well as keeping any documentation that is related to the dispute on-hand to serve as evidence if the problem intensifies. You should also include a record of those customers who have raised questions or disputes about their invoices, so you can easily see which customer does this regularly just to avoid settling their accounts on time.
Cashflow issues can well be avoided with the above-mentioned tips for proper invoicing. And if you would like to better your cashflow, you can also opt for cashflow-related services such as factoring, invoice discounting, or even asset finance (where you can buy the equipment and other assets you need without dipping into your available cash) through the help of cashflow experts such as Ultimate Finance.
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