Accounting and Invoicing: Making the Cut
One of the first reasons many entrepreneurs list for starting their own business is to make money (big surprise!), but it is astonishing to see how frequently and easy it is to forget to invoice a client. We must remember that we are all human and can make mistakes, just like customers. Getting clients to pay invoices in a timely manner can be a gruesome task of its own. Surprisingly, 43% of small businesses have customers who are more than 90 days past due on payments. 1 I’ve put together a few tips to help make your accounting and invoicing process less of a process.
1. Numero Uno: It may be your fault silly! Timely follow-up is the best way to stop an incident before it happens. It suggests to the invoicee that you’re on top of the ball and a professional that may or may not allow an invoice to be paid late. This slight suggestion is the fine line that may help close most of your invoices. Whoops! You might be the problem? Don’t fret. All small business owners struggle with invoicing. Getting paid is nice, but invoicing management would be better if it went away, right? At the end of the day, try doing as little of it as possible. Find a cloud product that makes this process less of a process. Nobody started a business to do invoicing and I bet it isn’t your favorite of tasks. All of us business owners struggle with this. It is time to get over it. Track down a solution that enables your business; one that takes the edge off things like accounting and invoicing; one that helps you manage more by managing less. How do you find the right one? Easy look around and test them out. Find the one that makes all the headaches less of a headache then choose that one.
Make sure that your invoicing is receiving billable time automatically. Make sure your accounting is also categorizing and tracking this business activity automatically for year end. NICE! Make sure that it will notify you as soon as an invoice is late. Make sure it will let your customers click a link from an email and pay the invoice within one minute flat.
You dreamed of running a business, not a business running you! There are an infinite amount of solutions out there. Get out of the sandbox and rejoice in the great entrepreneurial playground we’re in.
2. It’s always the little things! On the subject of invoicing via email, when I say email, I mean that your invoice email is being generated for you at just the right time. Your cloud solution should also let you know when it’s late. It should let you know via email and even via text. Go through all the steps of your invoicing process. Put yourself in the customers shoes and go in reverse.
Again, there are plenty of solutions out there. Be prepared to elevate to collections when necessary. Remember to do less of collections as well. Have a quick way to deploy late invoices to a collection provider if needed. Remember, be a professional when you elevate anything. Don’t let your invoices age, but don’t be rude about it either. Maintain etiquette with your client. Give them the benefit of the doubt. If you need to turn your bill over to collections, then do so, but that should be a last resort.
Don’t forget that time is money. Run the numbers and make sure you’re spending your time on the right tasks. You may very well have always disliked invoicing, so get better at doing less of it. If you send invoices by email (and who doesn’t these days), make sure your subject line is straight to the point! Use starters like Invoice: Account name.
3. Let your customer pay in any way possible and as quickly as possible too! Online, offline, mobile, local, national, global, in space, underwater and through the woods. You have to be emailing your invoices along with other invoice request methods. At the end of the day, you need to provide your customer with a quick and easy way to pay you. In a method they prefer. Period. That’s the holy grail of billing.
4. Make sure the primary info is never, ever lost. Bold your payment terms, etc. Flash the invoice up to your partner or employee for three seconds. Ask him/her what they remembered. If they can’t tell you when your invoice is due, then it’s not good. Walk through the thought process of what you do when you receive a bill. Think of the bills that you pay on time and what’s the reason why? Is it consistency from the invoicer? Whoops! I made you think about the number one above again that it may be you!
5. If it doesn’t look professional, you’re not a professional. Make the invoice look nice and branded, but don’t forget the primary purpose.
6. Everybody could use a reminder. Make sure all invoices are on a slow drip of healthy 15-day, 3-day, and 1-day alerts.
7. Paying Hard = Paid Less! Paying Easy = Paid More. For your customer to pay your e-invoice, don’t require them to setup an account. Respect their time! Requiring your customer to have an account to pay your invoice is just inconvenient, good sir! Make it SIMPLE. Automate the invoice to go out for you, let the customer click one link to pay you online via credit card. Easy.
8. Make sure the cloud solution is reputable. If you’re going to build a business in the cloud, you should know the company you’re relying on.
9. Watch your tone, sonny! Be human. We need more of this these days anyway. Business as usual has gone off the reservation and we all need to practice the virtual handshake. Don’t get all OFFICIAL just because this is an invoice and we’re talking about money. Remember that you have formed a business relationship that’s supposed to be mutually beneficial. Show gratitude on this invoice as well. If you don’t feel that way when you invoice, then you might have made some bad decisions beforehand. Look at all the steps you take as a business owner.
10. Automate. Automate. Automate. Manage more by managing less. That’s doable and possible with billing and invoicing. When invoices are late, make sure your invoicing solution handles it the right way at the right time. Have a scenario for every scenario and automate the real pain points. Don’t over think it though. Sometimes you may be the problem.
11. We can all use help with billing. (Again, we’re all human). Align with a cloud solution with a leadership team who you can easily reach out to with questions. Reward the small business solutions that remember what’s important about being a small business. As a business owner, you have to really evaluate what’s out there. It won’t be the solution that saves you; rather it will be you for realizing that it’s not the solution. It’s you and the people behind the product that know your business and you best.
Reward the companies that make business life easier.
Billing, invoicing, etc It may always be painful. Make a novel use of spending your time by getting better at doing less of it. Make sure the team can easily be reached and watch them. If they are iterating fast and listening to you, GREAT! Be clear of your business challenge and why it’s a priority. Tell them and see what they have to say. Anything’s possible.
1 Rocket Lawyer Blog. New survey reveals that collecting late payments is a challenge for small businesses. Accessed online on March 14, 2013. http://blog.rocketlawyer.com/new-survey-reveals-that-collecting-late-payments-is-a-challenge-for-small-businesses-95248.
About Lawton Ursrey
Lawton Ursrey, product marketing manager of Sage One, offering eleven tips to help make the accounting and invoicing process less of a “process.”