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Thursday, December 19, 2024

Invoicing 101: How To Get The Process Right

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Ava Gardner
Ava Gardnerhttps://www.watchmarketonline.com
Ava Gardner, The Technologist. I started blogging to jump myself towards to contribute in information.

You’re running a field service business and caring for customers’ lawns, offering plumbing or other field services. After each job, you have to send an invoice to a customer for you to get paid. Although invoicing your customers is a crucial part of the business process, few business owners are thrilled by it.

Your invoices reflect your brand and professionalism. It offers you a chance to win the customer for a second and subsequent times, but only if you get it right. If you do it wrong, you may face cash flow issues as the invoices won’t be paid on time or may not be paid at all. In this blog, you’ll learn how to invoice your clients the right way and get paid faster.

Img Ref: AdobeStock_95693962 for illustration purpose.

Choose a good invoicing software

In this day and age, you need to utilize technology wherever you can for business efficiency and productivity. In matters of invoicing, nothing comes as handy as invoicing software. This is the best way to create professional, consistent, appealing, and timely invoices that will get you paid on time. 

Fortunately, this area isn’t lacking, and there are various quality invoicing software options and tools to help you with this. Some such tools, for example Jobber’s hvac software, offer a full suite of essential business management features, such as an integrated customer relationship management (CRM) system and online booking. This technology allows you to easily manage your estimating and quoting, invoicing, and other business management functions, all within one platform. 

High performance invoicing software is more advantageous than creating invoices through a spreadsheet or by hand. Besides, it reduces time spent on creating invoices, and ensuring that you sent them promptly. You’re also able to track and send reminders from anywhere, eliminating a lot of time-wasting, manual procedures, and therefore most errors.

Include all the necessary information

The layout of the invoice counts a lot in whether a client will pay promptly or not. If you want to send the right invoice message to the client, ensure that your invoices are neat, well organized, and straightforward. A customer should understand the invoice at first glance. They should know who sent it and why.

If your customer is unable to identify the reason for the invoice, they’re likely to place it aside for dealing with at a later time. Include all the essential invoice components, including your business name and logo, customer name, services rendered, amount, when you expect the invoice to be paid and how. Always ensure that the service date, invoice date, and payment date are clear.

Match the estimate or quote

Your invoices must match the estimate or quote sent as closely as possible. Sometimes variations arise between estimates and invoices. That’s the reason you give a customer an estimate and follow it with an invoice. This depends on the actual nature of the services rendered and other variables such as time.

To deal with this issue, you need to manage customer expectations from the beginning. Present your quotes and estimates in a way that will translate to an invoice. Ensure that you show how amounts will change if some items increase due to issues like cost of suppliers or time. The point is to have the estimate that a customer can use to predict changes in the final invoice.

What matters is that a customer can understand the invoice easily and confirm how you’ve arrived at the amount you’re asking for. The software designed by Jobber helps you with this in providing free estimate templates such as this construction estimate template, which is especially useful for contractors. It’s a completely customizable template for projects that you can easily convert to an invoice afterwards.

Itemize every charge

Itemize each service in detail. For instance, if your services involve buying and installing an appliance, itemize the appliance and the service separately. If you use an item as complimentary to the customer, list it and invoice it at zero so that a customer knows they’re not being charged for that item.

You can manage customer expectations and prompt them to pay just by creating a well-itemized invoice. You want customers to look at an invoice as they would a receipt from the grocery store. Everything should be well indicated, itemized, and understandable. You reduce the chances of back-and-forth clarifications and questions and improve your chances of a prompt response from a customer.

Define how and when you want to get paid

There’s nothing as important in business as getting paid promptly for the services rendered. To that end, how you request payment plays a vital role. Defining how you want to receive payment is an integral part of the invoices. Your customers have diverse preferences, some wishing to pay through direct deposits, checks, online card payments, or bank transfers.

You need to consider having multiple payment options to increase the chances of getting paid. When you offer customers their most convenient payment option, they’re more likely to pay than when they need to go out of their way to clear an invoice. One of the payment options you need to consider is online payment.

Online payment makes it easy for customers to clear payments instantly by using their credits cards on mobile devices or computers. Ensure that the payment methods you offer are easy to use and secure, particularly in the age of numerous cyberattacks on customer data.

Invoice review at the end of service

Fortunately, technology has made it possible for office and field teams to collaborate. The field teams can create and send invoices to customers without the need to go back to the office. However, to keep errors at a minimum, it’s good practice for field teams to have someone else quality check invoices before sending them to a customer.

When you keep sending a customer amended invoices due to error, it prolongs the invoice time, causing payment delays. Besides, customers will consider it highly unprofessional and treat your invoices with suspicion. Trust is something you can’t afford to lose when invoicing customers.

Deliver promptly after service

The quicker you send your invoices after work, the faster you get paid. Make it a practice to send your customers invoices as soon as you’ve completed a job. As soon as the invoice is reviewed and approved, ensure it goes out to the client immediately. If possible, send the invoice along with the final work draft.

This ensures that the invoice’s due date is sooner than if you waited for some time. In addition, the service they received is still fresh in a customer’s mind. You are also less likely to make errors on your end if you send it straight away. Information can easily get distorted with time. Prompt invoice payments help to improve cash flow in your business.

Don’t forget the human touch

As much as you may want a customer to clear invoices quicker, it isn’t the only thing you need from them. You need to develop a mutual and lasting relationship. Ensure to thank the customer for their loyalty and patronage. Make this prominent and obvious at the first glance of the invoice. You can also include a thank-you note to go with the invoice. 

This creates a positive relationship and reminds customers that they’re dealing with a human on the other side of the invoice. If your customer is another business, it goes a long way if you contact the accounting department and introduce yourself. The person on the other end appreciates this courtesy. 

They’ll feel like they know you, making them attend to your invoices with the required attention. If there are issues that need clarification, the process is smoother than when they don’t know the person they’re dealing with.

Make prompt follow-ups

No matter what you do, not all your invoices will get paid on time. It’s your job to follow up and remind customers when it’s time to pay. However, it’s important to confirm if the customer received the invoice in the first place. You can do this immediately after sending an invoice.

Avoid making customers feel harassed into paying. Some may have genuinely forgotten about the invoice and have no problem paying.  Then you can send them reminders a week before the due date. If you don’t receive a response, remind them again after a couple of days. If there’s still no response, call. Keep the conversations friendly and polite with phrases like ‘please’ and ‘thank you’.

Takeaway

While customers love to receive quality services, most of them don’t like receiving an invoice. However, there are many ways you can make it sting less. Professional invoices, prompt delivery, itemization and accuracy, and expectation management are some of the things you can do to make customers respond positively to your invoices.

Top that up with a prompt payment discount, and you’ll be spending less time following up payments and more time serving customers and getting paid.

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