Whether you are a charity or business, sole-trader or multinational corporation, earning money and generating income is key to your survival. Without income, you don’t have a charity, or a business.
Most small business owners will focus on generating the income in the first place, which is understandable and – to a large extent – correct. They will concentrate on drumming up business, providing great service and ensuring satisfied customers spread the word. But many neglect a seemingly small, but essential piece of the puzzle – invoicing.
Invoicing means many things to many people, but essentially it refers to how and in what way you tell your customers what they owe you, and how they can pay you. Securing new business is superb, but pointless if you can’t invoice customers, or can’t get paid. And the best customer service and delivery in the world can all be let down, even undone in the eyes of some customers, by a crumpled piece of paper with a date and amount scrawled in biro handed over as an afterthought.
And what about retailers? Invoices are irrelevant, right? Wrong. Your sales process in terms of accepting payments and issuing receipts is key. How do you get this information into your financial records? What is the customer experience like? Can you email receipts? What payment methods do you offer? This said, retailers have some unique concerns – we’ll talk a bit more about this in a later blog.
The good news is that getting invoicing right is easy, if you know how. Here’s how invoicing should work:
• Aesthetics. Invoices should look as good as your uniform, your signage or your brochure. They should match your brand and be easy to understand for the customer. Believe it or not, an invoice is as much a piece of marketing as your Facebook page or newspaper advert.
• Accuracy. They should contain all the information they need to, by law if relevant (e.g. VAT registered businesses).
• Digital. By default, your invoices should be electronic and should arrive to the client by email. Of course, you should have the option to print and post an invoice if your client prefers.
• Remind Customers. Issuing polite, well worded reminders to your customers when payment slips their mind should be automatic. Why should you be tracking late invoices when software can do it for you?
• Make Payment Easy. A digital invoice should include direct links to make payment via your chosen method, say debit or credit card, or even Direct Debit.
• Smart. Your invoices should be generated by or connected directly to your financial records. That way, your accounts are up to date as soon as an invoice is issued, paid, amended or cancelled without any additional work (or cost). And with all of your invoices in one place, its easy to predict cashflow and identify bad debts.
If invoicing is an afterthought, or you’d love to improve the experience but don’t know how, then just get in touch with us for a free consultation. As digital accountants we are experts at improving the invoicing process as well as many other aspects of your business, and advice can be included in one of our monthly packages.