Large organizations and small businesses alike need accurate bookkeeping. While bookkeeping may seem tedious and sometimes a chore, its role in tracking revenues and expenditures cannot be overemphasized. Many companies that could have cemented their place in their niche have been bogged down by their failure to maintain proper financial records. The IRS recorded that 40% of small businesses incur an average penalty of $845 each year for late or inaccurate filings and payments. If you organize the financial records of a company, your job is highly valuable and professional.
And when it comes to getting paid, you need a professional bookkeeping invoice to make the process easy for you. Besides, you must know how to invoice like a pro and apply useful tips to billing if you want to get faster payments from your clients. Getting faster payment is essential for your cash flow and the financial health of your business. See the best practices of invoicing in the next section of this article.
As a bookkeeper, you are an expert in organizing financial records, and that skill should reflect in your invoicing. Incorporating some best practices in creating and sending your bookkeeping invoice may help speed up your payments. Here are useful tips to consider for invoicing:
In today's fast-paced economy, you can't afford to spend so much time on laborious invoicing methods only to find out that your bookkeeping invoice sent to a client is replete with avoidable errors. Online solutions and software make it easy for you to prepare and send invoices faster to clients. This way, your bills will be professional and error-free, which may also positively impact payment response time.
Your intention isn’t to overwhelm your client with your bookkeeping invoice; hence the document should have just enough information to help the client clear your payment. Include your contact information and that of your client wit relevant information about your service and the fees involved.
You can speed up your payment response time if you provide more ways for clients to pay you. For instance, accepting paper cheque alone may slow down responses from clients who want to hang on to their cash as long as possible. You have better chances of receiving faster payments if you accept e-cheque and e-card payments.
Clients tend to whatever suits them if your bookkeeping invoice lacks any formal payment policy. Create payment policies right at the contract level, which serves as a framework for your business relationship with your client. Think about different elements to make the policy enhance seamless payment. You have to decide if payment would be taken upfront, split, or requested on completion. Also, you should have a payment due date like “payment due upon receipt” or “Net 30 days” etc.
Even if you operate a busy schedule, remember that your cash flow can’t wait. You begin to create the "out of sight, out of mind" mentality in your client's mind when you procrastinate in sending them your bookkeeping invoice. The best practice is to send invoices to the client immediately or within a few days after service completion.
It is not uncommon for freelancers and small businesses to struggle with late payments. The National Federation of Independent Business survey revealed that approximately 64% of small enterprises reported having clients who delayed payment of invoices for at least 60 days. Now, that is not just frustrating; habitual delay in payment can potentially cripple a business.
See simple steps to keep in mind to get faster payments: