Running a business is no small undertaking. There are multiple facets that comprise even the smallest business and that contribute to its smooth running and success. For new businesses that want to scale up, there’s even more to consider, especially when looking for ways to facilitate and encourage growth.
One element that every business of any size has in common is invoicing. There’s not an organization anywhere that doesn’t rely on invoices to secure payment for goods or services. It makes sense then that when looking for ways to scale up a business, invoices can play a major role in growth.
To give you the tools you need to grow your small business to a large corporation, we’ve provided eight invoicing tips that can help in your upward trajectory.
Invoice Promptly and Professionally
One rule you should always follow, no matter the size of your business, is prompt invoicing. If you ensure you issue invoices when providing customers with goods or services, you’ll have a better chance of avoiding late payments.
Alternatively, if you have an agreement to invoice in arrears or on a specific day of the month, ensure that you adhere to this. Not only will this set a precedent with clients, but it will also ensure that you can maintain a steady cash flow that you can use to build your business.
Prompt invoicing processes create the impression of professionalism, and this gives your business a boost in the eyes of a customer. Customers who view your business as professional and consistent are more likely to work with you in the future, and this will ensure your business can keep on scaling upward.
Pay Attention To Detail and Itemization
When you’re drawing up invoices, you should aim to be as clear and concise as possible. You don’t want to issue invoices that lead to customers coming back and asking questions.
One of the best ways to avoid this is to provide a detailed breakdown of the products or services that you’ve provided. This includes:
- Unit price
- Total amounts for each line item
If you provide full details, your clients will readily understand what you are billing them for. This reduces the possibility of them disputing the payment or misunderstanding your bill.
Set Clear Payment Terms
There should never be any doubt in anyone’s mind about the payment terms. These terms are important for your business as they stipulate when you can expect payment, and they are crucial for customers as they know when payment is due.
Clearly stating your payment terms using the standard Net 10, 20, 30 or similar creates a clear expectation of when payment is due. Additionally, if you charge penalties for late payments, ensure these are clearly listed, and if you offer discounts for early settlement, do the same.
Incentives for early payment are an excellent way of encouraging clients to pay quickly. Even a 5% discount can go a long way towards encouraging a client to settle before the due date, and this can greatly boost your cash flow.
Follow Up on Overdue Payments
Following up on overdue payments is not something any business enjoys doing, but it’s crucial to your financial stability and growth.
If a customer has an overdue invoice, follow up within a few days after payment was due. You can do this with a friendly email or automated reminder, and if this doesn’t work, you may need to give them a call. Often, the personal approach to following up makes more of an impression, and customers find it harder to ignore a phone call.
If you let an overdue payment linger for too long, the customer may assume that you don’t really miss it, or don’t need them to settle. Don’t let this happen. You have made a sale, and they must honor their side of the agreement.
Offer Various Payment Options
If you only accept payment via a single method, your business won’t have as much chance to grow. Research shows that customers prefer having several payment methods to choose from, and the more you can offer, the more customers you can attract.
In today’s marketplace, you should accept credit and debit cards, bank transfers, checks, and payment mechanisms such as Paypal or ApplePay. However, if you can accept cryptocurrency, provide a QR code for payment, or any other similar service, you can broaden your customer base considerably.
Regularly Review and Improve Your Invoicing System
The business world is constantly evolving, and your invoicing should, too. You need to regularly assess your invoicing system and how it fits in with your business, and how it promotes your brand.
As a small business, using a printable invoice template is a smart way to create a professional impression and maintain consistency. However, as you grow to a large corporation, you’ll find that accounting software is going to streamline your invoicing process far more.
The more efficient your invoicing system is, and the more you scale it with your business, the greater chance you have of speeding up your growth.
Consider Outsourcing Or Employment
Sometimes, when your business grows past a certain point, you need a skilled professional to step in and assist. This is when outsourcing or employing an accountant becomes necessary. If your business is scaling up fast, an accountant or bookkeeper can take the pressure off your shoulders and ensure that all invoicing and accounting systems are running smoothly. Plus, they can handle tax and other financial matters, freeing you up to handle the tasks that you’re best equipped to do.
Focus On Building and Maintaining Strong Relationships
Most importantly, by having an efficient and professional invoicing system in place, you’ll send the right message to your customers. You’ll create and maintain strong relationships by means of mutual trust and respect, and you’ll have the chance to forge lasting relationships.
Your invoice is also an important marketing tool, and you can use it to encourage customer retention and ensure that the impression you create is a memorable one. Include links to your website, social media pages and any other platforms you’re active on to encourage engagement and interaction.
Invoices are the final stage of the customer journey, but they also offer the potential for you to send your customers back to the start of the sales funnel. If you follow these tips, you can use your invoices to grow your business from a small venture to a large corporation.