Late payments have become a surprisingly common occurrence in the business world. For instance, if you give clients 30 days to pay their invoice, it begins on the date you send it. So by waiting 10 days to send your invoice now pushes the possible pay date 40 days from the time the project was completed. The more organized your billing process, the easier it’ll be to manage and track what’s owed to your business. Then there are those who struggle with the entire process and end up waiting forever for certain clients to pay. For instance, in the UK, small businesses spend an average of 71 days waiting for payment.
What is the client billing process? (step-by-step)
According to invoicing statistics by Skynova, almost two-thirds of late payments can be traced back to inaccuracies in the invoicing process. This underscores the non-negotiable nature of having a why compliance is the most important part of business today billing system that serves as a precise, error-free communication tool. An ideal client billing system also focuses on centralizing records, tracking the progress of payments, and optimizing processes to improve efficiency.
- It helps create transparent, standardized, and comprehensive SOWs, minimizing billing conflicts down the line.
- It can help you create professional invoices within a minute, set up automatic payment reminders, and even accept payments online.
- If you are lazy about creating and sending new invoices, you’ll soon find yourself not getting paid in a timely fashion.
- By waiting too long, you risk your clients forgetting about your project, along with the payment owed.
Purchase invoice
If you send an invoice promptly after completing your project or shipping your products, you’re more likely to receive payments in a timely manner. Invoices that include a list of the payment methods you’ll accept and payment information like your local bank details also encourage customers to pay quickly. It can help you create professional invoices, send them off with a few clicks, and even get paid directly.
If you’re doing this manually, you can find a free invoice template online. It’s another way that e-invoicing makes life easier, because the software can send recurring invoices automatically on the right date. Part of knowing how to bill a client for money is realising you have every right to chase late payments without feeling you’re being unreasonable. Make sure the payment terms are clearly set out on the invoice and explain to the customer that interest will be charged on late payments.
If you’re interested in finding out more about how to bill a small business financial solutions and wave client, get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments. Make it as easy as possible for the customer to pay the invoice by offering the widest possible range of payment options.
Free Alignment Chart Templates and Memes
For long term projects or clients who are on a retainer, many businesses send invoices monthly. In this case, check which day of the month your client processes batch payments, or their payment cycle. For example, if their payment cycle goes from the 10th of each month, and you send your invoices on the 9th, you’ll get paid the next day. But if you send them on the 11th, you’ll have to wait for the next payment cycle. Since every client will have a slightly different preference for how they want to be billed, it’s best to set up each first-time invoice for a client as a template.
This consistency is a preventative measure to avoid confusion and reduce the risk of late or missed payments. However, if this doesn’t work after several attempts, then you’ll have to kick things up a notch. In your next email or phone call, you can let them know that if you don’t receive payment by X date, then you’ll escalate this into a legal matter. For instance, you can have it due on receipt or do a Net 10, Net 30, or Net 45, which simply means the client as 10, 30, or 45 days to pay their invoice.
As a small business, you want to avoid using too many different tools within your day-to-day operations. Too many platforms can result in excessive expenses, inefficient processes, and general confusion about which software does what. There are many different invoicing software platforms out there, so you need to check into them carefully to see what each discounted payback period capital budgeting calculator one offers.
If you want to be taken seriously by your clients, then you need to be professional in your communication, delivery, and invoicing. This way, all you have to fill in is the project details, rates, and the subtotal. From here, all you have to do is fill in the blanks and submit your invoice. You want to keep certain details in the invoice, such as the client’s name, address, and contact info. Or you can use an automated billing system like invoicely to do this for you.