Money For Lunch – 9 Tips for Invoicers, From Freelance to Big Business

9 Tips for Invoicers, From Freelance to Big Business

July 31, 2017 11:06 AM0 commentsViews: 14

 

1If you’ve ever sent an invoice, you understand that every step of the process, from drafting the thing to getting paid on time, is a struggle. In fact, one survey found that 60 percent of clients pay late, and more than a third are more than two weeks late.

Relinquishing money is a client’s least favorite chore, and the more you can do to make the process effortless, the better. Fortunately, easy invoicing is basically the same, whether you’re a lone-wolf freelancer or a cog in the big-business machine. Here are the top nine most important tips for doing invoicing right.

1. Set Effective Terms

If you haven’t already, your first step should be to set any invoice terms at all. Terms include acceptable payment types, payment deadlines, and penalties should clients fail to pay. The terms you choose will generally depend on your industry, your business’ style, and your clients’ habits. It might take a few payment cycles to work out what works for you, but as long as you keep clients informed, you should survive the ordeal.

2. Explain Your Terms

If your clients don’t know or understand your invoice terms, you might as well not have any. When you first agree to do business with a client, you should send them documents explaining your terms. Then, whenever you send an invoice, you should remind them about your terms. It’s nearly impossible to overdo clarifying your terms, so you should take every opportunity to do so.

3. Have a Hard Deadline

Every invoice you send out should include, in big, bold numbers at the top of the page, a due date. This is your client’s payment deadline, and should your client fail to pay before that time, you should begin adding penalties. If you forgive your client for missing the due date by a few days, you are giving all of your clients license to pay when they feel like it — which means dead cash flow, and likely a dead business, for you.

4. Keep Detailed Records

While you are working on a client’s project, you should be diligent in your record-keeping. If you wait to figure out your costs when it is time to invoice, you will forget some details and waste precious time. Instead, as you work, you should be tallying the hours spent on the project, the materials used, and more — all of which should them be detailed on the actual invoice. Plus, by doing this, you can alert your clients when they are likely to go over-budget, helping them pay in-full and on-time.

5. Draft a Straightforward Invoice

Invoices can get complicated fast. There’s a laundry list of items you can’t forget to include, such as:

  • Your contact information
  • Their contact information
  • Your payment terms
  • Products and Services, in detail
  • Prices
  • Payment totals
  • Due dates

However, if your invoice is disorganized or hard to read, your clients will put off paying — perhaps permanently. Fortunately, you can create a free invoice online using straightforward templates that your clients will read and respond to.

6. Target the Precise Payer

Just as a cover letter addressed to a hiring manager is more likely to get a look, an invoice sent to the person in charge of payments will probably receive a faster response. Unfortunately, the person who orders the project — or the person you correspond with over the details — is often not the person responsible for funds. You can ask your regular contact for their information or do some online research to find the true payer.

27. Invoice ASAP

Here’s a fun exercise: Pull up a personal credit card statement from a few months ago and try to remember what each purchase included. Likely, you can’t even come close. That’s what it’s like for clients who receive invoices weeks or months after a project is finished. The only difference is that clients have little incentive to pay for projects they can’t even remember. Therefore, as soon as you complete your project, you should send out an invoice.

8. Continue Communicating

An invoice isn’t an end to a relationship — payment is. As the due date for payment approaches, you should gently remind your clients of the project you completed and the payment you expect. It is imperative that your communications with clients remain exceedingly polite; oftentimes clients merely forget, as opposed to intentionally avoiding paying. If you are too harsh, you might lose a client — and all its contacts — for good.

9. Consider Automating

Finally, once you have found an invoice rhythm that fits, you might consider investing in invoice software. There are several automated invoice services available online that can streamline the invoicing process. Perhaps the biggest advantage of software is the lower likelihood of mistakes; however, if you are uncomfortable with too much tech, or you don’t send out many invoices, you might as well stick to simple invoice tools.

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