It’s likely you’re making at least one of these invoicing mistakes, but it’s not too late to put good practices in place.
If your business sends out sales invoices, it’s a good idea to have your customers on a set billing cycle. This keeps money flowing into your company on a regular basis. Steady cash flow is important when you have employees and company bills to pay. However, many small businesses struggle with proper invoice management. Here are the three most common invoice management mistakes you should avoid.
What is Invoice Management?
Invoice management covers all aspects of the billing process, from designing the invoice templates to printing and even posting the invoices to clients. As various customers prefer to be billed in different ways, the task of managing invoices can quickly turn into a nightmare for many business owners. Here are three of the most common mistakes and how to avoid them
1. Not Integrating Billing Platforms
Using multiple billing platforms for sending invoices and bills is a huge mistake that owners of fledgling businesses commonly make. Juggling multiple accounts will waste both time and money, complicating the process of sending out invoices and receiving payments. For instance, juggling both Paypal and card billing payments can unnecessarily waste time and stifle productiveness. To avoid this, it is best to use one integrated system that can handle all billing and invoices. Most integrated invoicing tools can track the entire billing process for you, meaning that you know the details of every client account in real-time.
2. Not Using Custom Invoice Templates
Most startups simply use standard invoice templates and miss the opportunity to build brand awareness and appeal. A professionally designed custom invoice template will make your new businesses stand out. An invoice template may include your company logo and colors or fonts that reflect the business and look professional. Small businesses that invest in custom templates report that clients are more likely to pay promptly. Eye-catching templates are more likely to end up on the top of the pile.
3. Not Automating the Billing Process
For new companies with few clients, sending out invoices manually every month can seem like the only solution. This is a huge waste of time and resources. This mistake is compounded if the company has recurring orders from the same client. New business owners can easily find themselves wasting time drafting and sending identical invoices repeatedly. The smart solution is to automate the billing process and hire a third-party invoicing solution. Invoicing services can automatically re-bill clients based on your information about the start date, the frequency, the due date, and the end date.
Streamline Accounts Receivable with Invoice Factoring
Invoice factoring allows you to get the cash you need quickly by selling your accounts receivable. Rather than sitting on invoices and waiting to be paid, you send the invoices to a factoring company, known as the factor. The factor gives you cash for the invoices and works with the customer to secure payment for the invoice. There’s no need to pay back a loan or wait for approval. The process is proven to provide quick cash flow without affecting your credit.
The Bottom Line
While technology won’t solve all of your problems, automating your invoice management offers many benefits. Outsourcing your accounts receivable to a factoring company, especially if it is based around a sound strategy, and with the right people can help save you time and money.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days.