Mistakes in Invoicing
As you probably know, everybody makes mistakes. However, it does not necessarily mean that you will do nothing to avoid them. Beware that errors are especially in terms of online invoicing, resulting in lost revenues and other bad scenarios.
If you want to get paid, sending invoices to your clients or customers is a critical step. For sure, you effectively understand this step. On the other hand, your hurriedness to send those invoices leads you to make invoicing mistakes. As a result, you have to deal with delays in getting paid.
Fortunately, you can take advantage of free invoice templates and invoicing software. That way, you have the best opportunity to minimize and prevent several invoicing errors.
If you are new to invoicing, below are the common errors you should avoid:
- Not Promptly Sending Invoices
Do you always submit invoices immediately after you have submitted your first draft to the clients? Do you sometimes negotiate upfront deposits, send an invoice before starting to work, and request the balance upon the project submission?
In either case, ensure that you are not waiting for your customers or clients to ask for the invoice. Remember that they are busy. So, there is a big chance that they may forget to remind you. In other words, it is your responsibility to send your invoice promptly.
- Not Itemizing Services
Beware that some clients or customers do not itemized and detailed the service breakdowns, while others do. Most customers or clients consider service breakdowns critical in reporting, recording, and tracking expenses.
No matter who your customers or clients are, make it a habit to provide itemized service breakdowns. It is an effective way to prevent receiving emails from clients or customers who want them.
- Sending Invoices to the Wrong People
Have you experienced sending invoices only to discover that they still have not paid by your clients after two days? If yes, you might follow up. However, your clients respond that they are not the right contact. Then, you need to send the invoice to the right clients.
If that is the scenario, you have wasted time and need to restart the invoicing process. Don’t worry; you can avoid this by asking who your key billing contacts are.
- Not Specifying the Payment Due Date
Most business owners make an invoice mistake of sending open invoices to their customers or clients and even include those vague payment terms. These terms include “within X number of days of article completion,” “Net 30,” and “upon receipt.”
If you want to prevent any confusion, ensure to specify the exact payment due day. For example, if you plan to submit the invoice on the 6th of July and want payment within five days, it is recommended to set the payment date for the 11th of July.
- Not Restating Payment Terms
Specifying payment terms and providing well-detailed service and cost breakdowns help avoid delays in your projects. Plus, it is critical to restate these terms. Then, do not forget to specify the services provided when you invoice to protect yourself against scope creep.
Bear in mind that some clients or customers request changes and extra revisions after you have invoiced. That is why it is ideal to restating the terms to save time and effort.
- Not Displaying Courtesy in the Invoice
Did you know that showing courtesy in the invoice increases the percentage of the on-time invoice paid by 5%?
On the other hand, you might forget to include phrases like “Please pay by [date]” or “Thank you for your business.”
- Including Surprise Fees
No doubt, you do not like surprise costs. So, your customers or clients are no different.
Instead of including surprise fees that resulted from extended work beyond agreement, you can simply speak to them before invoicing.
- Making It Hard to Pay
Your clients or customers might already receive your invoice, but they are clueless about paying you. That is why it is critical to let them know how to make payment, whether via online payment or through a bank transfer.
Once you specify the payment method, do not forget to determine whether you made the payment easy for the customers or clients. If you determined that the method is difficult on their end, you could change it.
- Sending Invoices with Errors
Another invoicing mistake that most business owners make is sending an invoice that contains errors. These errors include incorrect invoice numbers, spelling mistakes, not including requested information, or not referencing the PO.
If you create invoices using Excel, these errors are common. The best thing you can do is proofread the invoice before sending it to the clients or customers. That way, you can avoid back-and-forth emails.
Meanwhile, you can consider using an automated online invoicing software. As you create invoices, it will update the invoice number and enables you to preview them before sending.
- Not Following Up
If you send the invoice and do not follow up, you are actually making a mistake. For instance, if you send an invoice and after two weeks nothing happened, you can follow up.
Some business owners sent invoices, followed up seven days later, and received apologies and payments the same day. Beware that many customers or clients tend to forget to pay because of their busy schedules. Some of them even wait until the business owners barge them. In either case, ensure to follow up to avoid late payment issues.
Every time you do business, invoicing plays a critical role it. That is especially true for small teams and freelancers. Remember that getting paid on time can make a great difference between a good and bad month. That is why you need to take extra effort in making the invoicing process smooth and stress-free.
While invoicing mistakes are common to first-timers, there are several ways to avoid them. Hopefully, the topic above will help you get familiar with the common invoicing mistakes to avoid. Then, you will become confident in every invoice you make. Do not forget to use invoicing software for the best results!