Sending out invoices promptly helps keep your business cashflow healthy. However, you must also make sure payments arrive on time. A good invoice management strategy can improve business performance and reduce administration.
Invoice format. Your invoices should look professional and include certain things:
a unique invoice identification number
company name, address and contact details (VAT number, if applicable)
your customer's business name and address
description of goods and services provided
date when you provided the goods and services
invoice date
amount due
VAT (and VAT registration number) if applicable
total owed
payment date.
Accounting software in the cloud like Xero provides customisable templates including all the key elements for your invoice.
Invoice payment dates. It’s important to set realistic schedules for invoice payments. Many larger companies have standard 30-day or 45-day payment policies. However, as a small business, payment within 14 days can make a big difference. Before starting work for a new client make clear when you will expect payment.
Simplifying invoicing. It’s important to send your invoices when you despatch products or complete work. This helps you maintain a healthy cashflow for your business. However, creating each invoice manually takes a lot of time and, if you’re in a hurry, you can make mistakes. Many accounting software packages allow you to schedule invoices and create regular repeating invoices. This makes sure you’re consistent, saves time and shows customers you take a professional approach to business. You can simply allocate some time each week to check your invoice schedule and reconcile your business bank account.
You can even send invoice payment reminders automatically but choose your wording carefully. Some customers pride themselves on paying bills promptly and may feel offended if they receive reminders. You can turn reminders off for specific customers.
Invoice numbering. Larger companies won’t pay an invoice unless it has a unique identification number. Invoice numbering also helps you keep track of your invoices, so avoiding duplication is important. It’s a good idea to add a date reference, whether it’s just the year or the whole date, along with the invoice number. You might also add a code for each client, which is easy to set up in your accounting software. A reliable and accurate approach simplifies your year-end accounts and is essential for audit and tax purposes.
Digital payments. It’s now much easier to pay business invoices digitally. It’s fast, convenient and accurate for you and your customers. Easy payments increase the likelihood your customers will pay you immediately.
Providers like Adfin integrate with accounting software like Xero to provide a single, seamless process. You have all the payment methods you need in one place. Adfin sends your invoices and automatically chases payments, so it simplifies your day to day finances. It can send reminders by text, email or WhatsApp. Your customers can pay by bank transfer, Direct Debits and credit card. You have a clear and easy credit control dashboard, and you only pay for successful transactions. It synchronises with your accounting and other software, so you don’t have to manually add information.
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