Guide to ensuring invoicing best practice
For many B2B companies, receiving payment on time is not always a reality. By following invoicing best practice, businesses can help improve payment periods and free up funds for covering day-to-day operations and growth. There are various solutions to help ensure prompt payment of invoices from your clients, as the following invoicing best practice tips detail.
All clients are different and it’s important to remember their situations when creating payment terms and chasing invoices. The UK is well protected and regulated regarding invoice payments, with clear laws and enforceable consequences for breaking contracts.
Other countries are not as strict, so some potential clients may be slacker at meeting agreed payment dates. That’s why invoicing best practice involves researching clients beforehand.
Look at invoice regulation in their country, whether they belong to an industry body and if they have any online feedback. It should give a sense of whether they are likely to pay promptly or cause challenges.
Creating a contract or terms and conditions which specify exactly when clients have to pay is vital with any invoicing best practice. Standard terms require payment within 30 days, but for even quicker payment some clients may agree to even shorter periods.
Be sure to include these in the contract along with a late or overdue fee. This should be sent out promptly as well to enforce it and hopefully reduce any further late payments.
Routine is the best way to ensure things don’t get missed in the daily process of running a business. Keeping a regular invoicing schedule that sends out invoices on the same date every week or month ensures customers know when to expect them.
This makes it easier for both parties to stay organised and avoid missing sending out invoices or making payments. The same can be true for setting up internal finance meetings to review invoices every week or month to see which need sending or chasing up, as well as those that have been paid.
Small businesses with a handful of clients can usually keep on top of paid and unpaid invoices with a simple spreadsheet. When companies grow though, it can be much easier to use an invoice tracker system instead.
These collate all the information you hold about clients and their invoices in one place. They can be set to provide alerts when there are unpaid invoices, recording how overdue they are or when one needs to be sent out. It should make it easier to manage and send invoices out on time or early.
Digital payments are the quickest way for clients to pay invoices, so to encourage prompt settlements you need to offer as many options as possible. Credit card and PayPal should be two such options, as these can be processed quickly.
For businesses dealing with clients in other countries, accepting payment in other currencies should also speed things up. It avoids wasting time with either party having to convert currencies before making a payment.
When following up on invoice status, you might find that it takes many emails and phone calls before you get a reply. It’s important to remain persistent and ensure that your customer sticks to the agreed payment terms.
If you’re finding that getting paid on time is a challenge despite invoicing best practice, there are other solutions that can help.
At MarketInvoice we offer invoice financing to help your business improve cash flow, quickly and easily. This can tide you over during times of waiting for payments and boost growth by providing an advance against outstanding customer invoices.