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Invoicing is a major issue for all service businesses – one of the top five issues, certainly. Sales is certainly THE top issue, we should all be able to agree, but because invoicing reflects sales, in this sense invoicing is as important as sales. Invoicing is the MIRROR of your business, in both quantity and quality.
SOMETHING TO DO RIGHT NOW: Check how many invoices you are sending out on average per month. Now, resolve to set yourself one goal for next month: double it!
That’ll certainly be good for business, and will ensure you have your priorities right.
Some general advice -
1. Get your invoices out quickly. Second only to your sales calls, make the time to set up the invoices that you are entitled to lay on clients and GET THEM OUT THERE. No, not tomorrow; NOW!
2. Establish with each client what format they need the invoice in; whether emailed pdf is acceptable or they need hardcopy in the post.
3. Make your invoices insistent. Make it clear that the client has to pay by a specific date. Why not say something like “This is due to be paid by OR BEFORE x/y/zz.).
4. When creating estimates for clients, make sure that you include your payment terms and/or payment schedule. That way they are clear from the outset when you will require the payment.
5. State the fact that late payment can be subject to European Communities (Late Payment in Commercial Transactions) Regulations 2002. You are entitled to charge this interest and to cover your costs of collecting the payment.
6. Also, on the invoice, you could consider having a statement in relation to the negative impact that late payment has on business generally. A quote from your local enterprise board or Chamber, perhaps, that states clearly the fact that late payment should not be a feature of any forward-thinking economy.
7. In the cover letter/email/compliments slip, request confirmation that the client has received it, and why not also request confirmation of the date on which the payment will be made?
8. You should find out WHO is responsible for clearing the invoice for payment, and who is responsible for processing the payment. Get the contact details for both parties and record them carefully in your system.
9. If you don’t passively receive confirmation from the client, actively send an email to them and ask again for confirmation of receipt and of payment date.
10. Once you have a date agreed by which payment is to be made, take careful note of it in your system.
11. A week or a few days before that date, email the client a reminder: “Just a reminder that this invoice is due to be paid by or before x/y/zz. With thanks…”
12. If payment is not received on the date, email the client again the very next day, attaching a copy of the invoice. Depending on your relationship with the client, you could also remind them that late payment fines are already taking effect.
13. At that stage it becomes a credit control matter, which is another story for another day.
14. ULTIMATELY, you need to have clear terms & conditions agreed with your clients up front in order for your invoicing to run smoothly. Get your clients to sign a document wherein those terms & conditions are clearly outlined, including the need for prompt payment.
With Swift Accounts, you can create professional invoices fast, so you can concentrate on getting money in and get back to doing what you do best.
This article was written by Michael FitzGerald of SwiftAccounts.ie, A Totally New Concept In Accounting For The Single Person Enterprise.
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