Whether you’re a service provider, supplier, or operate in another B2B space, there’s a good chance that invoices play a significant role in your operations. Although there may be times when invoices feel like the least efficient way to get paid, chances are they still aren’t going to go away anytime soon.
While there may be times when you envy B2C companies that are able to instantly process credit card transactions through their website or in person any time they make a sale, the good news is there are steps you can take to maximize the efficiency of your invoicing process. To help you spot any areas of improvement in your process, we want to cover six common invoicing mistakes, along with what you can do to avoid or remedy them.
Avoid These 6 Invoicing Mistakes
1. Failing to Define Payment Terms
A mistake new businesses commonly make is sending an invoice and assuming they’ll get paid shortly after. This assumption often results in businesses sending invoices without defined payment terms. Without setting these terms, there’s no way to know if a business is expecting to pay on a Net 10, 30, 60 or other basis. Setting these terms in discussions and on actual invoices can help maximize the likelihood of getting paid on schedule.
2. Not Filling Out A Contract
Trust plays an important role in business. But that doesn’t mean you should provide a service or product to another business without getting some kind of agreement in writing. Even if it’s a simple one-page contract, having signed documentation is essential for having options in the event that something goes wrong.
3. Dealing with All Clients the Same
As a general rule of thumb, bigger companies have more leverage when it comes to dictating payment terms. So if you want to go after those kinds of clients, you may need to wait longer to get paid than you would like. On the other hand, this type of leniency generally doesn’t make sense for smaller clients and invoices, which is why you should keep some aspects of your invoicing adaptable to different types of clients. This may include setting payment milestones during longer projects.
4. Never Using Incentives
Whether it’s offering a discount for a prompt payment or instituting fees for late payments, including some kind of incentive with your invoices can have a big impact on getting clients to pay on time.
5. Waiting Without Following Up
It never feels good when you send out an invoice and then fail to get paid when expected. However, that doesn’t mean you should give up. Following up is the only way to know whether a client genuinely forgot or missed payment, or is going to require more hounding to pay up. Sending a friendly reminder when someone is getting close to their payment deadline can also be very helpful.
6. Not Making Credit Card or Online Payments Available
B2B companies often make the mistake of thinking that accepting payments via credit card or online will cost them too much. In reality, the cash flow and other benefits that getting paid through these methods can provide often offsets the processing cost. That’s especially true if you have a processor with great rates. To explore reliable processors that can offer the best rates, be sure to take a look at our top credit card processor picks.