Dealing with invoices might be among your least favorite tasks, but when you’re a small business owner, it’s obviously one of the most important. So, the best way to manage invoices is to create a strategy for generating, sending, and keeping track of them. Find out how to get a handle on invoices so that you can get back to work.
Choose the right type of invoice for the job.
There’s no one-size-fits-all invoice — different payment plans work for different projects, so before you begin work, talk to your client or customer about a payment schedule that works best for both of you, and agree upon one plan. Here are some options to consider:
Interim invoices
Instead of paying you in one lump sum, your customers can pay you in a series of smaller payments, such as monthly or when various sections of a project are completed. If you opt for interim invoices, you should also send a final invoice at the end of the project detailing the work that’s been completed and what’s been paid for.
Recurring invoices
For ongoing projects for the same customer, it makes sense to send recurring invoices at regular, agreed-upon intervals, like weekly or monthly. Getting on a schedule makes sending invoices part of your workflow, and, with any luck, your customer will follow suit and get in the habit of paying on time.
Final invoices
At the conclusion of a project, send a final invoice to outline the work that has been completed and the interim invoices that have been sent. Detail whether those interim invoices have been paid, and list the final amount that is outstanding (if anything). Even if the job has been paid in full, send a final invoice to wrap things up for both you and your customer.
Do your invoicing online.
A quick way to reduce headaches and streamline your invoicing process? Eliminate paper from the equation. Paper invoices have a way of piling up (for both you and your customers), and it’s easy to lose track of whether you’ve sent an invoice and whether it’s been paid.
With online programs like Square Invoices, you can keep track of everything in your Square Dashboard so you can check the status of every account from your computer or mobile device. You can also send invoices from your mobile device, and your customer won’t be charged a fee to pay.
Avoid common delays.
Even if you use online invoices and have an agreed-upon payment schedule, there are some other barriers to getting paid on time. Here are some issues that could slow payment:
You sent the invoice to the wrong person: The project manager or primary contact might not be the person who deals with accounting, so before you deal with a lengthy back-and-forth (further delaying your payment), ask your customer to whom you should send the invoice.
You weren’t clear about terms: If you think the invoice should be paid within a month, and the customer thinks that it doesn’t have to be paid until the completion of the project, you’re in trouble. To avoid an uncomfortable and frustrating situation, make sure your client agrees to your terms (in writing) before you begin work.
You sent the invoice on an inconvenient day: Customers are least likely to pay an invoice they receive on a Sunday. But when you send an invoice on a Thursday, you have the highest likelihood of being paid within two days. Determine a payment schedule that results in the speediest payment from your clients.
