Invoicing is a critical part of the business cycle, but it’s oftentimes the most difficult. Customers expect to be billed for services rendered, of course, but that doesn’t mean they’re excited to receive them. Paying bills is almost universally considered a negative experience, and this is an association that’s hard to escape.
As a result, there’s considerable value in working to make your invoices as painless as possible for your customers. Not only will you find that this improves your customer’s experience of doing business with you, but it will also likely get your invoices paid more rapidly. Try altering your invoicing process to include these suggestions.
Switch to Digital Invoices
Most businesses utilize digital systems for their accounting needs. When you send a paper invoice, you add an extra layer of unnecessary complexity. Your customer has to manually input the details of your invoice into their system. And if they don’t do this immediately, they run the risk of misplacing your invoice and missing a payment.
In many cases, customers can automate the integration of digital invoices, which saves them time. Plus digital invoices can include direct links to online bill payment services, making it quick and easy for your customers to settle their debts.
Accommodate Your Customer’s Preferences
Most of your customers will appreciate digital invoices, but some may still prefer old-fashioned paper bills. While printing paper invoices and mailing them is more difficult for you, it may still be worth doing it if it makes things easier for your customer.
In general, it’s a good idea to try and accommodate your customers if they have specific requirements for their invoices. Sometimes this means including specific information or changing the order of things. The goal is to make it as easy as possible for your customers to pay you, so it’s worth doing a bit of extra work.
Offer Many Different Payment Options
Not only do customers have different payment preferences, but those preferences can change. As an example, a customer that normally prefers to pay using a credit card might opt to pay with a check if their credit card balance is unusually high.
Part of making it easy for your customer to pay you involves making as many different payment options as possible available to them. The more you offer, the more likely it is that each customer will have their preference available, as well as their standard fallback option.
Digital invoices make this extremely easy. As mentioned earlier, you can place direct links for digital payments directly in the invoice. Information for more traditional payment methods can be included in written form in the invoice as well.
Design Your Invoices for Clarity and Brevity
Customers prefer not to have to hunt for information on your invoices. You should work to ensure everything listed is necessary and clearly labeled. If you don’t already, you should include a brief description of the services or products supplied to make it easier for your client to link your invoice with specific purchases.
On that point, be sure to include your customer’s purchase order numbers on your invoices if they supply then to you. This is another way to help your customers match invoices to actions.
Make Sure Your Customer is Aware of Their Payment Terms
You likely have regular terms that you use with most of your customers. These can change, depending on your customer’s preferences and payment histories. Because one customer’s terms may be different from others, it’s important to list them on each invoice.
Not only does this make it easier for you to follow up on outstanding invoices, but it also makes certain that your customer knows when their invoice is due and any discounts or fees that may apply, assuming they pay earlier or later than their due date.
Don’t Sacrifice Customers Because of One Late Payment
As a business owner, you know that there are peaks and valleys. Sometimes you’re flush with cash and other times you’re struggling to pay bills. If you have a customer that is suddenly paying invoices late, talk with them. Don’t assume they’re suddenly irresponsible. There’s likely a good reason why they’re having trouble getting invoices settled. Try and work with them before resorting to more drastic measures.
If you immediately become combative you’ll likely lose someone that would remain a good customer once they get back on their feet. It’s better to reserve more severe measures for customers that consistently abuse their payment terms.
Try these suggestions and you’re likely to find happier customers and better cash flow as a result.