Best Practices For Issuing Invoices
Invoices are legal documents that serve as a record of the sale for a provider and a notice of debt for a customer. However, despite invoicing being a crucial step in the financing process, there are often errors in the billing process and over 60% of all invoices in the U.S. are paid late.
Here are some of the best practices you can take when creating and issuing an invoice:
Be Transparent and Simple
By clearly listing what the invoice is billing for, your customers can easily understand why the invoice is being sent. Invoices tend to go through one initial review, and you want to make sure all presented information is clear and correct to prevent any disputes. Also make sure the invoice itself is simple and can be easy to understand at a glance.
Instead of using handwritten invoices, it is better to use an invoice software so that you can save time and reduce human error.
Track the Timing
Immediately after providing products or services, you should send the invoice, so that your customers know to pay. Sending late invoice notices may confuse customers as to what they are paying for.
Also make sure to contact your customers around the time an invoice is due. Before the deadline, you should send a friendly reminder. If the invoice is not paid by the deadline, you should follow-up with your customers and ask for a payment status update.
Ensure that you include any and all relevant information in the invoice and that all information is accurate and correctly presented. Such information would include:
Correct Billing Address
Payment Terms/Due Date
Remit to Address
PO Reference Number
A Clear and Organized System
Keeping a proper system for past and current invoices can help you track your invoice payments and whether payment is done correctly and matches the agreed upon amount. Knowing about how your customer handles your invoices can also help clear up discrepancies.
Use Invoice Factoring
It is a hassle to deal with invoice disputes and chasing payments from customers. This is where invoice factoring can help. By factoring your invoices with factors such as Accel Business Funding, you can save time and prevent potential problems associated with invoice collection. While it is still important to follow best practices when creating and issuing an invoice to your customer, invoice factoring can ensure that your invoice payments are collected in a timely manner.
Accel Business Funding has provided invoice factoring and has funded many businesses for more than $380 million. When banks say NO, we say YES to funding in 24 hours!