7 Invoicing Tips That Are Guaranteed Time Savers
March 18, 2011
Freelancers don’t want to raise (create) invoices. It’s an irritating necessity. It’s something we have to do if we want to get paid and that should be the main objective of any professional. While we do have to invoice our clients, there’s no reason why it should be such a lengthy task that it interferes with our ability to carry out paid work!
The tips below have been designed to save you time in the invoicing process. Remember, it’s not just the time it takes to create and organize your invoices that’s important. Perhaps the most crucial thing is making sure that your clients pay when you ask them to, as chasing up late payments – the bane of many a freelancer’s life – is the most time-consuming thing of all.
Be Clear About Your Payment Terms
State your invoice payment terms clearly on all invoices and keep them consistent. Make sure you outline your terms to your clients early on in the price negotiation process as this can limit disagreements further down the line. Be perfectly clear about how much you’re going to charge up front, how long clients have to pay, and any late payment fees they might suffer.
List acceptable payment methods on your invoices too. If you accept checks – say who checks should be payable to. If you’re using FreshBooks and online payment gateway, clients can even pay you online. Express your terms as simply and politely as possible. A happy client is a paying client, after all.
Invoice Little and Often
You might think that it saves time to invoice your clients for one lump sum at the end of a project, but you’d be wrong. Breaking down big fees into more sizable chunks (four payments of $2,500 rather than one payment of $10,000) makes invoices easier for clients to swallow and increases your chances of getting paid promptly. It will really help with your cash flow too. If you’re invoicing for a partial payment, make sure you make this clear on the invoice itself.
Itemise Your Invoices
Like the previous point, itemizing your invoices will actually make raising invoices slower, but will save you loads of potentially time-consuming confusion in the long run over what has been paid for and what still needs to be covered in a subsequent invoice. A detailed description of what’s covered in the invoice is useful for your own records as well as those of your clients. Nobody likes paying money for no reason. The more clearly you list the reasons for payment, the more likely you are to be paid on time.
Address Problems Quickly
It’s vital that you deal with late payments as soon as they arise. In the current economic climate (hopefully passing), you can’t be sure that a company which owes you money will still be operational a few months down the line. Don’t worry about seeming rude if you contact your client directly. There’s usually a good reason why an invoice hasn’t been paid and your client will more than likely appreciate the reminder. You should offer to resubmit your invoice (easy with FreshBooks). Always be polite, but be determined.
Remind Clients of Outstanding Payments
Payment reminders will greatly increase the proportion of your invoices that are paid on time. You can do this on the phone, via email or however you feel most comfortable. Online tools like FreshBooks will do this automatically as per your requirements.
Don’t nag your clients to death, but sending a reminder a week before payment is due and another on the due date itself is completely reasonable. You might even want to add a 5% or 10% surcharge for late payments. You’re well within your rights to do so, so long as it’s outlined in your payment terms.
Reduce Your Payment Times
It might seem obvious, but it works – reduce your payment times from 30 days to 21 or even 14 days, creating a sense of urgency, to get paid more quickly and reduce the number of people who forget to pay you. The shorter your billing cycles, the more quickly you can reasonably start reminding clients to pay up.
This guest post was written by Tom Walker who works at Cartridge Save, one of the UK’s leading online business supplies specialists.
about the author
This is a guest post for the FreshBooks blog. FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.