Sending an invoice to your clients is an important step in getting paid. No doubt, you understand this. But, often in your haste to send those invoices, you may make some common invoicing mistakes that lead to delays in getting paid.
Considering how critical cash flow is, particularly when you have loan repayments to make and other fixed expenses, these are mistakes you’d rather avoid, right?
Here are ten common invoicing errors you can easily rectify / avoid:
As a freelance writer, I usually submit my invoice immediately after I’ve submitted my first draft to the client. In instances where I’ve negotiated an upfront deposit, I send the invoice before I start work and request the balance upon submission of my article.
In either case, don’t wait for your customers to ask for the invoice; they’re busy, and chances are they’ll forget to remind you. The responsibility is yours.
The sooner you send that invoice, the faster you’ll get paid. So don’t wait for month end. Act promptly once your work is complete!
Many business owners make the mistake of sending “open invoices” to clients and include vague payment terms. Consider these examples:
“Upon receipt,” tells the client that they need to pay the invoice as soon as possible. But, “as soon as possible” is open to interpretation.
“Net 30,” is confusing for those who aren’t business savvy.
“Within X number of days of article completion,” can also be understood differently among clients.
To avoid any confusion, specify the exact payment day. For instance, if you submit your invoice on the 1st of August and want payment within a week, set the payment date for the 8th of August. The ability to customize due dates is a feature that FreshBooks Invoicing provides.
Has this happened to you? You send an invoice to your contact at a company, only to find that after two days they still haven’t paid.
You follow up, and the client responds by saying they’re not the right contact and that you need to send the invoice to person X.
You’ve now wasted two days and have to restart the invoicing process. Instead, tie up those loose ends at the beginning of the relationship by asking who your key billing contact is.
While some clients don’t need detailed and itemized service breakdowns, others do. For many customers, it’s a matter of procedure and helps when tracking, recording, and reporting expenses.
Making it a habit of providing itemized service breakdowns, regardless of who the client is, is a foolproof way to avoid receiving emails from clients who want this.
For instance, if I wrote a blog post for a client I may include the title, word count and state that it’s a blog post.
A previous article on Freshbooks titled, “7 FoolProof Strategies For Getting Invoices Paid on Time,” highlights how showing courtesy in your invoice can increase the percentage of invoices paid on time, by 5%.
Many, however, fail to include phrases like “Thank you for your business,” or “Please pay by [insert date].”
Considering the benefits, why don’t you give it a try?
It’s important to specify terms and provide a detailed breakdown of services and costs to avoid scope creep that can occur with any project.
It’s also crucial to restate these terms and specify what services you provided when you invoice. Why? So you can protect yourself from this scope creep.
Clients can sometimes make more demands on your time by requesting extra revisions and changes after you’ve invoiced. Restating the terms protects you from this behaviour.
You’ve sent that invoice. Three weeks have passed and still, no payment. Have you followed up?
I can’t tell you how many times I’ve sent an invoice, followed up a week later and received an apology and payment the same day.
Some clients forget to pay because they’re busy, and others wait until you badger them (yes, these clients exist). In either case, following up solves problems of late payment.
If you’re someone who dislikes following-up and would rather take the personal element out of it, FreshBooks lets you automatically send customized reminders, so you never feel awkward about following up, again.
The client’s received your invoice, but there’s one problem: they have no idea how to pay you. Sound familiar? You need to let your client know how to pay you, whether it’s via a bank transfer or through online payments platforms such as Stripe.
Even if you have specified the payment method, ask yourself, “Have I made it easy for my client to pay me?” If the ability to pay isn’t one click away, you should consider changing this.
FreshBooks solves this problem by accepting credit card payments from Visa, Mastercard and Amex. Not only is it convenient for the client, but it speeds up payment.
No one likes surprise costs, and your customers are no different. If you need to do extra work that extends beyond the agreement, speak to your client before invoicing.
Have you sent an invoice, only to realize that the date is wrong, the invoice number is incorrect, there are spelling mistakes and you haven’t referenced the PO or included information that the client requested?
I’m sure you’ve made at least one of these mistakes, especially when creating invoices in Excel. The solution is to proofread your invoices before sending them to prevent constant back and forth emails.
Alternatively, upgrade to an automated online invoicing system. FreshBooks updates the invoice number as you create invoices and lets you preview invoices before sending them.
Aside from these features and benefits, and the others mentioned in the post, FreshBooks Invoicing helps you:
So, are you ready to improve your invoicing process? Try FreshBooks free for 30 days with no credit card required and see just how easy it is to avoid these mistakes (and experience countless other benefits too!)