No one likes receiving a late payment, but 61% of invoices are paid late due to avoidable errors. 11% of customers report never even receiving an invoice at all.
Learning how to manage invoices is essential for any business to run smoothly. And if you’re struggling to get your invoices paid on time by clients, it might be due to your own organizational hiccups.
Here are five common invoice management mistakes that could be affecting your business.
1. Being Inconsistent
When sending out invoices, do you have a clear system and strategy, or do you send invoices only when you have time in your schedule? If you want to receive payments fast, it pays to be consistent.
Keep a schedule for when you send invoices, and don’t delay. If you work with a client or partner each month, be sure to send your invoice on the same day each time.
2. Not Offering Multiple Payment Methods
One mistake that can delay getting invoices paid is if you don’t offer enough payment options.
Clients may be used to using one payment type, such as a company credit card or wire transfers. It’s your job to make it easy for them to use the method that’s best for them.
When sending your invoice, offer different payment options to keep customers happy and to avoid unnecessary delays.
3. Not Clearly Itemizing
Clients may work with multiple businesses, making it hard to remember exactly what they’re paying for on each invoice.
Skip any confusion by clearly itemizing on your invoices. Describe the exact product or service that you’re charging for and date each line. This will also help you stay organized and prevent you from double charging or billing the wrong client.
4. Forgetting Taxes
You might not charge tax (or you might, depending on local laws where you do business) on your invoices, but you will be responsible for paying taxes on income received from your invoices later.
Be sure to keep invoices organized to help you manage payments come tax season. This might involve making paper copies and carefully filing them away or organizing documents using a secure cloud system.
5. Neglecting Unpaid Invoices
You and your company need to get paid. But unpaid invoices are, unfortunately, a common part of doing business.
Don’t be afraid to be assertive, following up with any clients who haven’t paid. Be polite, but firm. Make sure that the invoice due date is mutually understood, and ask if there’s anything you can do to help them make their payment swiftly (such as offering another payment method).
Continue sending regular reminders to any clients that don’t pay. For invoices that remain ignored by debtors long term, you can try invoice discounting to help you get your funds with the help of an outside lender.
Avoid These Invoice Management Mistakes
If your business requires regular invoicing, it’s essential to become a pro at organizing your invoices. Be aware of these five common invoice management mistakes and make sure they have no place in your company.
Get more tips for your professional life in our other business articles!