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The top CEOs know that managing business invoices is necessary to maintain cash flow. Basically, invoicing is sending bills to clients after selling them goods or services. An invoice contains necessary details like what you have sold, the amount owed by clients and payment methods. Quite naturally, the number of invoices increases with rising sales figures. Having some invoice management best practices in place enables small businesses handle their cash flow successfully. On the other hand, mistakes in managing business invoices can cost you, leading to lack of funds. To prevent such occurrences, this post lists five crucial tips to manage business invoices successfully.
Start By Setting Up An Account
In the initial stage of invoicing, setting up an account using all business details is a must. Business owners should make a check list of required accounts payable information such as the account name, company telephone numbers, tax identification number and contact person. Then, create an account with an online invoicing software using these account details. Of course, take a second to double check your business details to reduce the chances of any errors. Finally, you will be set up with a new invoicing account to streamline the business invoicing process.
Automate Your Business Invoices Process
Many small business owners are automating the invoicing process. Thanks to technology, they can choose from a wide variety of business automation solutions. Examples of popular invoice automation tools include Billbooks, Hiveage and Xero. These high quality business invoicing tools conduct data processing, verification, approvals and payments. In addition, they store invoicing information for future reference, further simplifying the process. Definitely, automating business invoices reduces both work load and mistakes made. In fact, some of the top payroll companies even offer these services.
Consider Invoice Templates
If you are a small business owner, using a pre-fabricated invoice template can save you precious time, which even the most skilled time management expert would appreciate. With a quick Google search, you can find tons of free invoice templates to tweak to fit your business perfectly. This will help you prevent avoidable mistakes, like leaving an important information field off of the invoice form. Consider using an invoice template to improve your business invoicing process by preventing simple mistakes.
Use Electronic Invoicing
Electronic invoicing solutions are also another great option to help improve your invoice management abilities. Electronic invoices save you money. You can eliminate the costs of mailing, printing and storing paper documents. Using electronic invoices will also save you time. That grants you more time for business operations that you would rather be focusing on. If you want to streamline your invoicing processes, consider using electronic invoicing whenever possible.
Offer Diverse Payment Methods
Making diverse payment methods available to clients improves business invoices efficiency. Depending on traditional payment methods like cash or check may cause delays in receiving payments which can cause a need for bootstrapping each month. Moreover, tech savvy clients are preferring online payment methods like credit cards, debit cards and PayPal transfers over these traditional options. Certainly, offering a variety of payment methods enables clients pay invoices faster, preventing unnecessary delays in cash flow.
Straightforward Payment Terms
Business invoices should contain straightforward payment terms, informing clients about the due date. To be upfront with customers, ensure that the payment terms are printed clearly on every invoice. Generally, businesses offer a period of 15 to 60 days for clients to make payment. However, new businesses may ask for as little as 10 days for payment while they still have a tight cash flow. On the whole, straightforward invoice payment terms improve the chances of getting paid on time, even for a nonprofit corporation.
Introduce Penalties and Incentives
Another way of improving cash flow through business invoices is introducing penalties or incentives. Upon making payments early, clients will receive incentives in form of discounts, special offers and cash back. Meanwhile, any late payments will lead to incurring a fee or penalty. Using these business invoice strategies, you can encourage clients to make payments faster than usual.
Business owners can easily improve cash flow by managing business invoices more closely. This is easier than trying to stop sending money. By creating an invoicing software account using relevant business details, they can automate the process. Then, the business can offer more flexible payment methods and terms. Finally, the business is able to track business invoices accurately and provide early payment incentives to gain increased cash flow.
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