10 Tips to Improve Your Business Billing Process
One factor that contributes to small business success is funds coming in regularly, receiving client payments in a timely manner, and getting paid in full. So it is important to have a business billing process that gets invoices out on time, and ideally, paid on time. Here are some tips to improve your cash flow by making your business billing process seamless.
1. Set Terms Up Front
Your terms should be clearly stated to your client from proposal to payment.
• Do you bill hourly or by the project?
• How are any time overages or unexpected costs billed?
• Do you require a deposit? For example, one firm we have worked with requires a 50% deposit on projects more than $2,000, or for new clients until they have a proven payment record.
• Do you invoice multiple times during a project, especially if it is long or has multiple stages? Or do you only invoice once at completion?
• What timeframe does the client have to pay?
• What forms of payment do you accept?
• What are the penalties for late payment?
• How will the client be apprehended for late or non-payments?
2. Invoice on a Schedule
Decide on a billing schedule and stick to it. Will you bill at the end of each completed project, weekly, or at the beginning of the month? Figure out what billing business process schedule will allow you to be consistent so you can get paid.
3. Have a Business Billing Process System
Like having a schedule, having a clear system with outlined procedures is essential to a business billing process. Whether you use a spreadsheet to keep track of invoices, or a cloud software program, each invoice should be easily found and tracked. Tracked information should include invoice numbers, date sent, payments and dates paid, amounts still due, and any other pertinent information.
4. Consider Cloud Software
Even if your company has a more manual system that works for you, it may be worth considering a cloud billing software system. Integrated with your project management and/or time tracking software, creating invoices is only a few clicks away. Billing reminders and statements are easy to access—and send to clients—too. It will simplify your business billing process. The cloud system may even help offer your clients a convenient way to pay, ensuring you get payments in faster
5. Invoice with Supporting Data
• Make sure invoices received by clients meet these recommended elements:
• Have clear and easy-to-read details regarding the invoice and project including due dates, tracking number, itemized charges, deposits paid and total amount due
• Give a contact for your company if the client has any concerns or questions about the invoice
• Make it clear and easy for the client to know how to pay their bill: with an online paying tool, an address for mailing a check, credit card authorization form, or include an ACH application
• Any addresses and client contact information must be accurate in order to reach the person responsible for paying the bill
• Minimize errors and check for accuracy
• Invoices represent your company: Research shows that invoices with a company logo are paid sooner than those without
6. Keep Detailed Records
Keep accurate records for the project, invoices sent, and any follow-ups requesting payment in case there are any questions about the invoice, or a client contests the charges. For example, if your service is one that is paid by the hour, keep detailed tracking of the hours worked, what work was completed in that time, which staff worked on the project and more.
7. Follow Up Regularly
Part of an effective business billing process is having a system for following up on overdue invoices. Will you contact late paying clients weekly, semi-monthly or monthly? Will you send friendly reminder statements in the mail, email follow-ups, make phone calls, or a combination of these actions? Sometimes late payment is an oversight and the client will appreciate the reminder as flagging an accounting error or lost check payment.
8. Make Billing a Priority
Having an efficient business billing process is essential to the success of a small business. Without getting paid for the work you do, you can’t maintain cash flow, and, therefore, keep your doors open. Make the time in your schedule to keep your business billing process up to date.
9. Value Your Worth
You put a lot of effort into the work you do for your clients. Value your time and your right to get paid for a job well done.
10. Make American Receivable Part of Your Process
If you still have concerns about getting paid on your invoices and cash flow shortages after following these business billing process tips, American Receivable may be able to help. With offices in Dallas and Austin, American Receivable is ranked No. 1 nationally among small-business factoring companies. Since 1979, we have provided small businesses with the financial resources and accounts receivable management strategies they need to grow, increase inventory, make payroll on time, and effectively compete in the marketplace. We can provide funding within as little as 24 hours in some cases. Call us for a FREE quote today at 1-800-297-6652, or complete this quick quote form.
By Jack Stieber – President – American Receivable