When thinking of paperwork, people usually think of a dull, dusty and time-consuming job. Unfortunately, this is true, but it`s also part of the job that every business owner needs to get in order and to handle immaculately, with no mistakes.
Of all the paperwork that businesses are dealing with, this one is most important ─ billing clients.
Running a successful business means having all the right pieces, and without a streamlined and accurate billing system, a business might see significant delays in payment.
On the other hand, if you don`t have a plan on how to get this billing process and paperwork handled, you may run out of a steady cash flow, hindering the opportunity to grow and operating your business.
Even though billing clients is the most important part of every business, many owners are still making mistakes which are leading to overdue and unpaid invoices.
In order to help your business, avoid some of these common and very costly mistakes:
Be Sure to Make a Contract
We have talked about this several times ─ have everything in writing. Maybe a handshake means “We are partners now, ” but when it comes to bills not getting paid, you can`t say, “Oh, but we shaked on it.”
In the business world, a signed contract is your shield. Before you start to work with clients, make a contract and agree to it with every step. Make sure to include payment terms, how and when you expect payments, if you charge late fees for not paying on time (I suggest you do), who the person is that receives your invoices, and so on.
Next time, if you have a problem with your invoice, you can just say to your client that it`s in the contract and that both of you agreed on it.
Include a Due Date
I say to people all of the time that a due date is significant and they still keep forgetting to add one.
If you don`t add a due date, that means that you are saying to your client, “Okay, pay me when you can,” and they will ─ when they can.
By adding a due date to your invoice, you are telling your clients that you are expecting to be paid by the date specified on the invoice. Otherwise, if you don`t have a due date, you will get paid ─ sometime.
Be Consistent with Invoicing
The more you wait to send an invoice, the longer it will take to get paid. Every business has its own business cycle. Not billing in that period means that you will wait for the next one.
Some businesses have billing cycles of two weeks, so if you miss one, then you will get paid during the next one, in 2 weeks. If I did my math right, that means that you will wait one month to get paid and you will always be one invoice behind.
Even though you maybe think that this is not necessary, people like to know what they are paying for.
I like to receive an itemized bill statement to see how much I`m being charged for, and what for.
We have a writer at our office that works remotely, and when he sends his invoice, he always includes:
- The number of articles for this pay period
- The title of each article
- The number of words for each article
- The total price per word
- Contact information
- A due date for payment
And, guess what?
He never has a problem with receiving his payments on time because we can easily see what he has worked on and when he expects to be paid. And, if there is a problem, we can easily contact him about it.
Have a System
Handling invoices on your own can be a hard task to do, and I hope that you are not using a shoe box and Excel files.
I strongly recommend to everyone to start using an online invoicing tool, such as Sighted, that can help you to stay organized and have everything in one place.
A good system can help you and take some of the tasks off of your plate, like sending reminders and follow-ups, and you can access the tool from everywhere in the world.
Final Thoughts with Sighted
When I started to invoice and bill clients, I often didn`t get paid for a month or two because I didn`t add the relevant information, didn`t add a due date, forgot to specify how I wanted to get paid, didn’t add appropriate contact information, and was waiting for a check to come in the mail, and so on.
During that time with clients, I exchanged several emails and phone calls to get things right, and it`s hard to be nice to people when you are expecting your money ─ but in the end, it was my fault.
To get paid on time, make sure to use the steps listed above. To get started now, create a free account here, at Sighted.