Billing is a vital part of a business operation. As such, it is very important that it is done properly. It should be accurate and sent in a timely manner. It should never become a hindrance in having an orderly way of running your business. To achieve all of these, consider the following pointers:
- Establish clear billing terms
Before anything, you need to set clear terms with regards to billing. Your customers should be well aware of your billing setup and the terms. Don’t surprise them unless you are offering viable price reductions or discounts. Make sure that your clients are aware of the deadlines and the consequences of not being able to meet the deadline. Everything should be laid out clearly to your customers and those who are handling the billing functions should be more than aware of the terms and the changes therein.
- Be consistent and prompt
Consistency is necessary for good billing. This is to create a sense of predictability among customers and of course to make sure that your cash flow proceeds as expected. You should be sending bills at the same time or time frame. If you bill after a delivery or the fulfillment of a job order, you need to make sure that you send the bill after a consistent interval, a day or two after the delivery for example. Additionally, it helps being able to send invoices as promptly as possible. If you can give the invoice at the same time you deliver something, it would be better. Avoid the confusion or issues created by forgetting to send the bill or because of not sending the bill with consistency.
- Use the right billing tools
To achieve near-perfect billing, it is important to get the right billing or invoice management software. It should be something flexible and customizable to easily match the nature of your business. It should allow you full control over what’s to be included in the invoice. It should be highly intuitive that everyone expected to use it can easily figure out how to make it work. It should also be easily integrated with other business software. Additionally, it would be preferable to choose an invoicing software that supports multi-job invoicing, the ability to handle different due dates per customer, and also something scalable. It should adapt with the expansion or growth of your business. Moreover, it would be great to have an invoicing software tool that is cloud-based so it can be accessible anywhere and anytime.
- Create simple but clearly detailed invoices
All the important details should be clearly indicated in the invoice. Foremostly, the invoice should be clearly labeled as an “invoice” to make it easier for customers or clients to identify the document, digital or printed, you are sending them. There should be an invoice number and dates (date the invoice was made and the due date). The names or brief descriptions of the items being invoiced should be clearly written alongside the corresponding price and the total balance for the invoice. It would also be good to include your contact numbers on the invoice and, as much as possible, indicate all the important billing terms. If you are using technical terms, jargon, or acronyms on the invoice, it also helps including persistent notes on the footer part spelling out or defining these technical terms.
- Ensure that you have a paper trail and tracking system
You invoices should be easily traced and tracked. You should have a system that efficiently manages your invoices, particularly the use of invoice numbers and the need for approvals or signatures as the documents are being transmitted. You should be able to quickly locate invoices and match them with specific transactions. There should be a system for monitoring if invoices have already been sent and to ascertain that they are accurate. Again, if you choose a good billing software, this would already be automatically covered.
- Send reminders
Once due dates lapse, it’s important to remind clients that they already have to pay. They may have not received their invoice or they may have forgotten about it so they need a little note for a reminder. Sometimes, reminders may also be needed to tell them that they already need to work on finding funds to pay their obligation. You can send multiple reminders—one before the due date, another on the due date, and a few more after the due date in case the client still has not paid yet. It also helps if your reminder can provide links for payment options so they can quickly proceed to making a payment if they already have funds available.
Improving your invoicing process does not have to be a difficult or complicated task. Basically, by just choosing an excellent invoicing software, you are already significantly improving your process by maybe around 90%. The right billing or invoicing software is the key. Most of the other points mentioned above are already integrated in a good invoicing software. Perhaps the only other important thing you need to emphasize is the need to send reminders and effectively pursue delayed payments.