Late invoice payment may be caused by different reasons. And there are some basic mistakes that could only delay the payment even longer than expected.
An invoice is a document prepared by a seller for their buyer to collect payment. Businesses use the invoice to include and summarize the cost of products or services rendered to the buyer. It contains details, description, as well as terms of payment. Other than collecting payment, invoices also provide some main benefits, for example maintaining records and payment tracking. Invoices allow businesses to keep necessary payment records and to keep track of the amount of money that has been or must be paid. Now, let us take a look at how to send a client an invoice and what mistakes to avoid.
- Send your invoice on time or early
Sometimes, a seller does not send their invoice straight away once a project is complete. It is one of the most common mistakes that are often found in the business. And when an invoice is not sent immediately, the payment is likely to be late. This is especially if the client has multiple ongoing projects and they deal with a number of invoices. A late invoice will be automatically put at the back of the priority list.
- Make it convenient
An invoice is supposed to be clear and easy to understand. It must contain all the necessary information that does not confuse the buyer. It has the invoice number, dates (of service rendered and the invoice sent), project details, costs, name and contacts, as well as terms and conditions. Make sure everything is clearly stated. And for an invoice to be effective, it is also recommended to provide various payment methods for more convenience.
- Follow up the process
With your invoice, you must have mentioned the terms of payment, which include when the payment is to be expected at the latest. It is important to communicate with your client, especially if this is the first time you work together, and ensure they are clear with the process. You may follow up with an email (or any other communication channel that works for you and your client), making sure they have received the invoice and understood the payment process. Needless to say, it is only necessary with clients you have not been familiar with or when there seems to be a delay to your receiving payment.
- Make necessary adjustments when required
At the end of the day, no one wants to chase late payments. Getting paid on time is the rule. It is why in handling invoices, you may have your own approach but some adjustments could be useful in case you need them. There are things that businesses do to make sure their invoice payment could go smoother. This includes getting upfront payment, sending a reminder, and halting or stopping the work until the payment is received. Any of these is unnecessary if everything works well with you and your client. It is only recommended if you encounter a client with a habit of delaying payments. It is to make sure that both you and your client value the professional relationship you have and understand how the system works.
As you adjust how your invoicing system works, you could also consider adjusting another part of your business operations, such as your payroll process. While this may not directly relate to your invoicing process with clients, it could relate to how your finance team works. Payroll is a time-consuming task. When efficiency is key, it should be advantageous to consider another option where your payroll system could be up to par. And that option is made possible with Kayaroll. This is a payroll software that we design to help every business out there, from big companies to small-medium enterprises (SME) to startups. Kayaroll is a one-stop solution that will automate your payroll tasks and allow your HR and finance team more time to focus on more urgent matters of your business. And since we are committed to helping businesses like yours, we currently offer Kayaroll for free so that you could see how the one change you make with your payroll system could make all the difference. This offer is limited only to the first one hundred businesses that join us. Take a look now and enjoy your new and better payroll system.