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7 Invoice Management Tips For Your New Small Business

Invoicing can be a headache for small business owners, especially when there are unaccounted paid bills or unpaid claims. Invoices are essential in maintaining a business's cash flow. Focusing on a working invoice management system is key in ensuring your clients pay up on time. Here are seven invoice management tips for your small business.


Minimize the allowed payment period


Since cash flow is essential for the running of your business, receiving your payments on time for services you have delivered will keep your business afloat. However, some clients can delay remitting payments by even a week, which can significantly affect your cash flow. The way to avoid such hiccups is to minimize the number of days you have set for accounts receivables.


Reducing the credit term days will push your clients to pay faster than when you give them extensive periods. Although invoicing has a standard payment period in some industries, in instances where you have flexibility, opt for prompt payment terms to reduce delays.


Verify Customer Information


Some customers fail to pay their invoices because they either don’t receive them or receive them very late. It could be because your invoicing system does not deliver invoices to clients at the expected times.


Verify your customer details and ensure you update them regularly. Some customer information like mailing addresses, emails and commercial areas may change, and failure to capture that in your invoice system may cause delivery failures. Besides, correct contact information enables you to send payment reminders to your customers to alert them of due dates. Establishing this control allows you to stay on top of your invoicing game.


Use digital billing system


In this digital era, generating invoices in electronic forms can help you track record of complete payments and pending payments. There is software that small businesses can use to manage their invoicing system online. Digital payment systems allow your clients to have flexible payment options.


With a digital billing system, you can access invoices easily without the hustles of digging through multiple files. The cloud storage also enables your customers to have shared control of invoice processing.


Monitor your invoicing regularly


A small business needs to keep track of every cash that comes in and out of business. Monitoring your invoicing system regularly on a weekly or monthly basis will enable you to control your account receivables and collections without the risk of losses.


Since small businesses do not have a large pool of cash funds, invoice monitoring makes auditing processes simpler and faster. Besides, your staff can follow up on any errors before they become a business loss.


Simplify payment options


Offer your clients easy payment options so that it is faster and convenient for them to settle payments any time they receive invoices. Digital payment options, credit cards, checks and direct payments give your customers a vast choice that they can easily use whenever and wherever they are.


Direct payments and debit or credit card transactions limit the usage of paper checks or the risks of getting bad checks. You can also be sure of quick payment processes and regular cash flow to your business.


Be firm on your decisions


Businesses are about establishing productive relationships that also border on discipline in delivering contract agreements. Being firm allows you to set strict guidelines on when you expect your clients to pay after receiving invoices. It also dictates that you do not shy away from following up late payments.


Be clear with your clients that any late payment causes delays in your production processes and can ultimately lead to the cancellation of your contracts. Send emails or make phone calls when there are late payments and discuss the repercussions of this in an amicable way with your clients. You can also enlist the help of a virtual assistant to follow up on such late payments or send reminders when due dates approach.


Invoice at the end of the project


Don’t wait until the end of the month to send an invoice because this only encourages late payments. Instead, as soon as you have delivered a project, send the invoices. The best thing is with invoicing software, you can send invoices from production sites to cloud storage.


Managing your invoicing system will save you from losses that arise from billing. The tips above can help you develop a structure that works and keeps your business cash flow constant.