Writing invoices and sending them to customers in a timely fashion is an essential part of running a business. If you aren't able to quickly and efficiently collect payments, you'll find it difficult to collect the cash you need for improving your business. This makes it difficult to hire people, develop products, launch marketing campaigns and so on.
The slightest error in writing invoices is likely to detract from your office's efficiency.
It all starts with writing invoices that are clear, direct and get the job done. This requires getting all the details exactly right. The slightest error in recording a customer's name, account number or payment information is likely to detract from your office's efficiency and make business development much more difficult.
Figuring out the basics first
Invoicing is crucial for ensuring your business will have the working capital it needs - so where do you begin? According to Commonwealth Bank of Australia, the first step is figuring out whether there is any goods and services tax (GST) being charged on the sale you're making. This will determine whether you're sending a "tax invoice" or a regular old "invoice."
After you've got the right header to begin with, you'll want to make sure all the information below is accurate and up to date. This includes the payer's name, account number, the amount being billed and the date. If any of this information is wrong, it will surely lead to logistical issues later, so proceed with care.
Knowing when to follow up
When you've got a lot of unpaid invoices and are struggling to collect what you're owed, you might need to tighten up your billing process. Smart Accounting emphasises that you should have a standardised timeframe for when you apply more pressure to your customers. For example, you could send them a friendly reminder of their overdue payments when they're one day late, then progressively harsher letters at 15 and 30 days past the due date.
This is an unpleasant (and time-consuming) task for many small business owners. If you don't enjoy contacting customers and badgering them for money, you may want to automate this process - as well as find alternate sources of much-needed cash in the meantime.
Getting cash when all else fails
If you need money to develop your business, but it's all tied up in your debtors' books, the solution is to find another source of fast cash that can get you moving. At Earlypay, we can help with that. We offer debtor finance solutions that will give you up to 80 per cent of the amount you're owed.
Debtor finance is a viable option for all sorts of businesses, large and small alike. If your company is in need of a little cash, contact us and we'll work out an arrangement for you.
If you'd like to learn how Earlypay's Invoice Finance & Equipment Finance can help you boost your working capital to fund growth or keep on top of day-to-day operations of your business, contact Earlypay's helpful team today on 1300 760 205, visit our sign-up form or contact [email protected].