The business world is an amazing place to be. The daily hustle keeps it alive, thrilling, and a brilliant place to be. One of the most thrilling tasks in a businessman’s life is sending out invoices and getting paid.
Do you know one-third of invoices are paid late? That is a lot of invoices and money. Whereas, some are thriving on or before date payments like a pro. How is it possible for the latter to get paid so quickly?
So, we tried to bring to you some tips from the businessmen, who are lucky to get paid sooner, decode their methods of invoice payment system/setup for all. This invoice payment system includes payment terms and best practices that you should follow:
What are Invoice Terms and Conditions?
Terms and conditions set on the invoice are the laid-out rules or policies by the company that talks about-
● Mode of payment
● Payment cycle
● Currencies, for global businesses
● Late payment charges
● Due dates
● And legal actions
Due date, in any invoice, is one of the most important factors in an invoice. The invoice issue date and its due date play a crucial role in getting payments in time. A smart businessman not only keeps a track of its own payment cycle, but also of his clients. He is exactly aware of when his client’s payment cycle starts and drops an invoice exactly then. So that the invoice stays on top and gets cleared in the first payments.
Well, this is a smart decision? Did you ever think of it?
But posts take time? How can you be more accurate about invoicing and payments? Set up an online invoice payment system. An invoicing software will send invoices in mails, which is quicker. And online payments will get you payments transferred in a click. Your client does not even have to move a step. Isn’t that cool?
Smaller durations get you paid quicker
Invoices with closer due dates might miss their last day, but still tend to get paid sooner than others lying in the line. As a human psychology, missing deadlines creates panic and then tends to get complete sooner.
● An average invoice due in a week tends to get paid in a minimum 13 days.
● An invoice due on 14th day gets paid in 18 days
● 3 weeks due invoice takes 25 days to get paid
● And, an invoice due in month gets paid in 40 days
Generic payment terms are changing
Don’t worry about offering shorter payment terms. You’re not the only one in the bandwagon. Today, more than 75% of businesses offer invoice clearance within 2 weeks. So, the market is changing and so are expectations.
There might be expectations for customers with bigger bills, but those are negotiable. Offer discounts, installments, or ask for middle grounds to get payments cleared faster.
Send invoice at the earliest
One of the easiest ways to start clicking the invoicing clock is by sending invoicing online to your clients as soon as you FULLY complete the jobs you’re asked to do. Once you complete your job and get a satisfactory response from the client, shoot an invoice towards them. It is then that your clock starts ticking and you’re bound to get paid at the earliest.
Never underestimate invoicing or delay it. Because each time you do it, you are pushing away your payday and ultimately hampering your cash flow.
It is okay to follow up for payments
You don’t have to wait for an invoice to cross its due date to follow up. Sending a gentle reminder while the invoice is still pending is completely fine. Try sending a friendly email note or a gentle voice note to remind your clients of their dues.
An online invoice payment system like Invoicera comes with automated payment reminders. Choose templates to schedule or customize payment reminders as you like to send to the clients. Set dates and schedule the frequency of reminders depending upon the approaching due dates. Just don’t go overboard with reminders. It is unprofessional.
Now, Top 5 Tips to Get Paid Quicker
Inward cashflow is the supplement for a business that keeps it going. But, Invoicing does not ensure monetary rewards to a business. Sending an invoice is only the first step. So here are top 5 payment practices that you should follow to get payment in time.
● Finalize payment terms before getting started
While discussing the project, finalize payment terms too. It is always beneficial to lay your policies transparently, beforehand. Tell your client clearly about your offline or online invoice payment system, billing cycle, invoicing approach, and penalties. Lay enough emphasis so that your client is bound to take it seriously. Discuss and bend policies if possible. But, make sure to do all of this well in advance.
● Make sure your invoice is self-explanatory
An invoice is a list of service/products offered with complete payment and contact details. It is a crucial document that involves money. Thus, make sure each of your invoices is able to explain itself fully without the client having to call you again and again. Add itemized list, but if there is a need add details of the listed items too.
● Send the invoice directly to concerned person’s mailbox
Ask and only send the invoice to the concerned person’s mailbox. This way you’re enhancing your chances of getting paid in time. Remember, an invoice clock starts only when it reaches the right person at the right time.
● Stay in touch with your clients
To get an invoice paid in time, keep reminding your clients about the payments. Send gentle reminders or automate reminders with online invoice payment systems to keep your client reminded about their dues.
● Add late fees
If your payment terms are clear and well-spoken off, then add a section of late fees in your invoices. Let your clients be aware of the charges they might have to pay in case they miss payments. Be confident about late fees and ensure your clients abide by the rules too.
Finally, Create an Online Invoice Payment System that Works
Invoicing is tedious, yet most regardful. To make it convenient and simple, set up an online invoice payment system in your business. An online invoicing software aids you in creating invoices, accepting payments, and keeping a record. Moreover, today’s latest software automates.
Automation means the software is able to automate invoices and shoot them to clients when you pre-schedule them for the day. They even offer multiple features like payment tracking, invoice tracking, record-making, sending reminders, and more to help your business scale better.