Best practice for invoicing your clients and customers

Invoicing plays a central role in maintaining financial stability and nurturing client relationships. To enhance the efficiency of this critical process, we’re sharing some best practices in this blog to help you.

1. Timely Sending of Invoices

Timing is key. Ensure that you send out invoices promptly upon completion of services or delivery of products. This sets a professional tone and expedites the payment process.

In some cases, you might be sending invoices before work has begun, if that’s the case, by sending it promptly, you’re setting the tone of your business from the start.

2. Develop Professional Relationships

The use of polite language, incorporating expressions like “please” and “thank you,” helps to demonstrate that you are respectful and professional.

Please & thank you can go a long way to creating good working relationships with your clients.

3. Simplify Your Invoice Structure

Clarity is paramount in invoicing.

Keep your invoices succinct and well-organised, presenting a clear breakdown of charges, the total amount due, and the agreed-upon payment terms. Simplicity mitigates the risk of misunderstandings and facilitates a smoother transactional process.

For more information on what to include on your invoices, read our blog.

4. Diligent Follow-Up Procedures

Implement a systematic approach to follow up on overdue payments.

Consistent but polite reminders ensure that outstanding payments are addressed promptly, maintaining a healthy cash flow for your business.

Remember, we don’t always know what’s happening in other people’s lives and businesses, so whilst their payment might be late, don’t forget to be polite.

5. Embrace Online Invoicing Solutions

Transition to online invoicing for efficiency and accuracy.

Digital invoicing not only expedites the payment process but also minimises the potential for errors associated with manual methods.

Online systems often have the option to set reminders as well, which means you don’t have to manually follow up on unpaid invoices, unless they run over the reminders.

6. Clearly Defined Terms and Conditions

Establish transparent terms and conditions related to payments.

Clearly articulate payment terms, late fees, and any other relevant information at the start of working with someone. This transparency minimises the risk of disputes and ensures that both parties understand their obligations.

Take this one step further by ensuring this information is in your contracts. This will further protect you should you run into any problems.

7. Maintain Open Lines of Communication

Foster open communication channels regarding invoicing matters.

Proactively address any issues or concerns related to payments, reinforcing transparency and trust with your clients.

By being approachable and understanding your clients are more likely to let you know if there’s going to be an issue, before it happens. It also makes talking to them about paying you much less scary.

8. Follow Tax Obligations

Be aware of your tax obligations associated with your business income. Allocating a portion of your earnings for taxes is a great way to prepare for your tax return.

Following this best practice should help things to run as smoothly as possible but nothing is ever perfect. Payments are one of the trickiest things about running a business but getting it right can make a huge difference to your motivation and your bottom line.

If you need further advice or information about invoicing, we’d love to hear from you.

Share this post

Similar posts you might like...

Accounting

Cash flow management tips for businesses

Cash flow can be the lifeblood of small businesses. Monitoring and being in control of your cash flow can make a big difference to the success and growth of your business. In this blog, we’re going to share with you some tips to help you maintain a healthy cash flow in your business.

Read More »