Common Invoicing Mistakes you could avoid
Most businesses these days streamline their systems to enable smooth operations and fast data entry. Accounting software are noe being used to handle accounting, payroll, and tax filing, instead of relying on books and receipts. A business might use cloud accounting, in which data and financial documents are stored online via the cloud.
Reliable accounting software can track sales receipts and provide information for taxes and VAT returns. However, many smaller firms still prefer paper invoices to digital ones often overlooking the advantages that come with bookkeeping automation.
It is best to avoid invoicing mistakes at all costs. Sometimes you can get away with a small mistake that the client won't evennotice it. Other times, they will notice the mistake right away and want to know the cause.
There is also the possibility that if your client is confused by your invoice, they will be less likely to pay you on time because they are wondering if there is anything else that could go wrong with your invoicing procedure.
The following is a list of frequent invoicing errors that every business owner should avoid:
Invoices that do not appear to be professional
Consider implementing an invoicing system that generates professional, consistent invoices. This should include the completed work, the price, and the number of people that worked on it. Our free invoice generator can also calculate the amount for you and send the bills automatically. Invoices that seem professional help to establish your trustworthiness, and the uniformity can put clients at rest.
Failure to send the invoice on time
As soon as the invoice is ready for dispatch, it should be delivered to the client. Your client will take a lot longer to pay you if you present the invoice late. If you send the invoice as soon as the work is done, you'll get paid faster. So don't wait until the end of the month to do it. Using cloud accounting software that enables easy call-outs and invoice processing, invoicing problems can be easily prevented.
The payment method is not specified
If you only accept payment by card or cash, make it clear; otherwise, clients may give you cheques or use other means that don't align with your business. Be specific about what you want and how you want the payment to be made.
By stating how you anticipate the payment to be made, you can avoid additional difficulty on your behalf or the client's part.
Forgetting to add due dates
Some businesses may forget to add payment due dates on their invoices. Clients often postpone payment when they find there is no due date on the invoice. If due dates are easy to see and understand, on-time payments will massively improve.
To avoid any mistakes, specify the correct payment day. If you submit your invoice on october 7th and expect payment within a week, set the payment date for October 14th. In addition, the majority of invoicing software has a feature that allows you to customize due dates. As a result, you should take advantage of it.
Failure to follow up
Many business owners wait a few months before reminding their customers about late payments. They may believe that harassing clients for payment may lead to the latter not paying at all.
The trouble with this is that you're more likely to forget about the payment or settle for a smaller amount than what was agreed upon. Both options will hurt your cash flow. As a result, it's great if you contact your customers as soon as possible, especially if the payment deadline has passed.
In this day and age, it is no secret that small business owners are under a lot of pressure to find ways to minimize costs, as well as keep up with the demands of their customers. Finding inexpensive ways of doing business can mean the difference between staying open and closing down forever.
Lipana provides affordable bookkeeping and accounting services that ensure entrepreneurs are not only getting paid on time but are also able to monitor their expenditures.