Invoicing Do’s and Don'ts - Advice from the Experts

You've done the work, now it's time to get paid! Are your invoices encouraging your clients to pay quickly and on time? Your invoice is part of your customer's experience with your business and doing it well will encourage them to pay you faster. 

It's important to be paid quickly – a good payment turnaround can benefit your business because strong cash flow lets you pay your bills, capitalize on opportunities, and remain stable. It all starts with invoicing. Here are our invoicing tips and guide on how to get paid quickly.

Include a Due Date

You shouldn’t think of your invoice due date as optional. Clients absolutely need a reminder of when the invoice is due whenever they look at it, or there’s no real motivation to go and pay it. You should also think carefully about the terms of your invoice. If your industry standard is 60 or even 90 days, you may want to buck the trend with something more reasonable, such as 30 or 15 days. These terms help you get paid faster and help you get on missing payments faster, too.

Also, keep your due dates consistent so your clients understand when they should pay.

Create a Self-Service Portal

Mailing or hand delivering invoices is outdated, and even emailing them creates the opportunity for them to get buried or land in someone's spam box. Try a self-service portal instead that offers payment methods to customers. Deliver the invoice through the portal, so that your customer is immediately able to pay the moment that they get the invoice.

Choose a portal with lots of payment options, or you will discourage your customers from using it.

Direct Your Invoice Properly

Sometimes your point of contact in the company is not the best person to send the invoice to. When you start working with a client, ask them who should receive the invoice. Often, you’ll have a dedicated contact in accounting who should get all of your invoices. This can save you time, as you won’t be relying on your contact to send your invoice to the right person. That extra step can actually add a lot of time if your contact is busy.

Offer Early Pay Discounts

If it is affordable for your business, offering a small discount for early payment can really help you get paid faster. Try offering a two percent discount for payment before the 15-day mark, or even earlier. Customers who want to take advantage of this discount will often pay the moment they get their invoice. That can save you a tremendous amount of time and work in collecting the invoice.

Don’t offer too much of a discount, or a discount for common pay terms like 30, 60, or 90 days. Those who pay exactly on-time should be motivated by late fees. Use a discount only to encourage the fastest turnaround possible, or you may simply be losing money without getting enough benefit.

Are you still struggling to get paid quickly, even when using these best practices? You can get paid even faster and have a healthier cash flow with invoice factoring! At J D Factors, we pay you as soon as you send your invoice, which can have huge benefits to your business. Reach out to learn more about factoring today.