Invoice like a pro: 7 ways to improve your invoices
If you’re having trouble with late payments or are concerned by the growing number of companies that are, optimising your invoicing process can increase your chances of getting paid on time.
A recent survey by FreshBooks looking at over 10,000 invoices found a number of correlations between aspects of the invoice and the speed with which clients pay.
We explain how to create the perfect invoice here, but if its quick tips and insider knowledge you want read on for our top 7 takeaways that you can easily apply to your own invoicing process.
The easiest suggestion to action is simply being polite. While we always go above and beyond to be polite in our communications with customers, not everyone includes please and thank you in their actual invoice.
Possibly because it’s an official document or a pre-agreed payment, they are deemed unnecessary, but FreshBooks found that invoices with please and thank you included got paid a median of two days faster than those that didn’t.
Offer online payments
More and more companies are already offering online payments, so if it’s something you haven’t introduced yet it may be time to consider it.
Many customers find it simpler to complete a payment online, and invoices that offer online payments get paid an average of seven days faster.
Send automatic payment reminders
We’ve discussed the benefits of automating your payment reminders many times before. As well as cutting back on admin at your end, it keeps your invoice front of mind with your customer and reduces the chances that they’ll forget to pay it.
This video showing an effective credit control timeline includes some great tips for the types of reminders you can send and the timeframes you can use.
Make sure your terms are clear
Revisit the way you’ve laid out the terms on your invoice. Ensure that they clearly tell customers exactly how they need to pay the invoice and use specific language.
It can also be worth mentioning “late fees” in your invoice, as research has showed that 94% of invoices that do get paid.
Break up larger invoices
While this won’t be an option for everyone, certain service providers may find it beneficial to break up invoices into smaller chunks. FreshBooks found that invoices of less than $1,660 (£1,318) got paid 11 days earlier than those that exceeded the amount.
If your service is ongoing, consider breaking up your invoices to cover smaller phases of the work rather than invoicing all at once.
Limit line items
Similar to invoices for larger sums, invoices with too many line items also seemed to cause a delay in payment.
This may be because there was more to review and confirm or simply because the invoice appears more overwhelming, but the survey showed that 2-5 line items as the sweet spot.
Don’t invoice at the end of the month
If possible, try and set your invoice date away from the end of the month. With a majority of companies issuing invoices then, it is likely that they will take longer to go through and be paid less quickly.
On average, invoices sent on the 30th and 31st took up to 20% longer to get paid.
Are there any recommendations you have for creating the perfect invoice? We’d love to hear what you’ve learnt in the comments below!