These 5 Invoicing Mistakes Could Cost You Big Money Over TimeWritten by Marya Sutimi on June 14, 2021
When you start your own business, invoicing is the goal as it is only one step to the payment for the work you do. While some may think invoicing is easy, pay attention to some common mistakes in your invoicing process that may cost you money and your time.
In this article, we will get into details about some mistake blunders that commonly occur and some effective ways to avoid them. We make mistakes sometimes, but we can always try our best to avoid them.
So, why not prevent it by setting up an invoicing process that could ease you and your clients’ payment in the future?
5 Common Invoicing Mistakes That Could Cost You Time and Money
From delaying your invoices, forgetting to follow up, to not including the due date on your invoice, these are the common mistakes done by freelancers and small businesses.
After gaining trust from your customers, sending an invoice can be a way to showcase your professionalism. To ensure this from your end, make sure to minimize these invoicing errors!
Not providing the terms of payment in the agreement
Having an agreement signed by you and your client is necessary to ensure that both parties are clear with their rights and responsibilities. Outlining the payment term and method can save you the time and energy to go back and forth with the client when it’s time for you to proceed with the payment.
Many productivity apps can help you be precise with your client onboarding system, from generating leads to setting up your payment system. Having it outlined in your agreement can help to protect your business. At the same time, it also keeps your client well-informed of your expectations for the payment.
In addition to that, there are several elements that you can add in your agreement to ensure clarity between the two parties involved. These include the following items:
- The service details to avoid the ambiguity that could lead to possible disputes in the future.
- The deliverable dates, unless the project is open-ended.
- The assigned contact information from both parties, which include the people in charge of the relevant project and transaction.
- The payment terms, which include the payment method and schedule and any additional fee if necessary.
Not automating your invoicing system
Automation for your invoicing system can be a game-changer as it saves you some time from having to send invoices manually. It ensures your profitability reporting accurate with real-time data, allowing you to focus more on other necessary things for your business growth.
There are many options for the invoicing platform that can help you get a better invoicing system. While it is helpful for your productivity, using automated invoice processing can also reduce labor expenditures, printing, and mailing expenses.
Not adding necessary information in your invoice
Your invoice has to be accurate, as you want to avoid looking unprofessional by mistakenly sending a document with some basic errors. When you submit an invoice to your clients, make sure to have these included before you send it to them.
- Invoice number.
- Invoice date.
- Due date.
- Company name and contact details.
- The responsible person related to the payment
- Payment terms.
- Any applicable tax numbers.
- The detail of the product or service purchased.
Not using your invoice as a branding tool
A well-formatted invoice can go along the way for your branding. Adding a logo to your business can be one of the things you can do to gain your brand recognition. After all, an invoice is also a representative of your company, so don’t forget to make it look nice!
Using your brand colors with your logo attached can improve your brand awareness in a competitive market. Most of the invoicing software in the market offers you customizable options to brand your invoice with many practical functions that can ease your invoicing experience.
Not backing up your invoice data
Even if your invoice is sent and successfully paid on time, it doesn’t mean that you don’t have to back up your invoicing data. Archiving paid invoices for your business can come in handy for any unforeseen payment dispute. After all, it’s better to be safe than sorry when it comes to your business.
Using a cloud-based invoicing platform can be an alternative to minimize clutter in your billing and transaction record.
5 Things to Consider When You Choose an Invoicing Platform for Your Business
Using an automated invoicing system can be a practical solution to minimize payment errors for your business. Processing invoices manually is subject to preventable mistakes that could cost you time and money in the long run. Choosing the right platform for your invoicing system can be a game-changer to improve your consistency across invoices through reporting, transparency, accountability, and archiving.
There are many invoicing software out there, but how can we be sure that the one you choose is the best for your business?
Before you begin comparing the invoicing platforms available in the market, here are some things to consider when choosing an invoicing system that works for you.
1. Calculate your budget
Budget can be a sensitive topic, especially when you just started your business. There are many invoicing platforms available in multiple price ranges that you can opt for accordingly. Some paid software also offers a free trial, which allows you to get firsthand experience before you go all-in to purchase the whole package.
2. The integrations to your accounting software
One of the benefits of using an automated invoicing system is the ability to track your income and expenses efficiently. The transparency offered by invoicing software will allow business owners to monitor their cash flow with insightful reports easily.
Whether you choose an offline or a cloud-based invoicing system, one thing you should consider is whether it can be integrated into your accounting software to enable you to track your cash flow efficiently.
If budget is not your concern, you can also find some invoicing platforms that can also handle all your accounting needs in one software.
3. Check the available features in the software
While online invoicing might be your main reason to use an automated payment system for your business, it is also important to check some other features available in the platform before you decide to use it.
Many online invoicing systems now offer multiple features, but it is not necessarily the best platform for your business if you have to pay for features that you’ll never use.
To avoid some invoicing mistakes in the future, pay attention to these features in your invoicing system:
- The customizable templates feature that enables you to generate an invoice with professional branding
- The feature that allows you to follow up on unpaid invoices.
- The feature to save your client profiles
- The online invoicing feature that connects to multiple payment options
- The feature to store and send receipts and invoices
4. Compare different platforms and packages to find the most suitable one for your business
Once you identify the budget and the features you need for your automated invoicing system, compare some available options that are aligned to your needs to see which software or package that works the best for your business.
Whether you’re looking for an offline invoicing platform or cloud-based software, you can always do your due diligence before investing in the most suitable software for your business invoicing system.
5. Ask for a trial or a tutorial to make sure that it’s user-friendly
The last thing you want to do when choosing an invoicing software is to spend some time trying to figure out how to use it when there are some invoices in line to be submitted for the payment.
If you previously used a different invoicing platform, you may want to look at some other options that are similar to it to make sure that the new one won’t be too complicated to use. Many invoicing software companies also allow you to do some free trial or tutorial to showcase how their platform works before you buy it.
You may also want to choose an invoicing software applicable to use through your mobile device and web browser. If your mobility is high, it is recommended to find that that is accessible across the platforms.
Why You Should Put Your Invoicing System in Automation
Automated invoicing systems can save you a lot of time and money, as it can minimize some common mistakes that may jeopardize your business operations.
While there are some alternatives that you can opt for the invoicing platform, as a user, you also need to identify the features that you need in your automated system.
Avoid paying more for the features you don’t need, and try to be more efficient and find a platform that fits your budget and needs. After all, why risk the preventable invoice mistakes if you can sort things out to ensure professionalism for your business?
So, if you happen to encounter invoicing errors in the past, it’s wise to consider setting up your invoicing system in automation to minimize the mistakes in the future. No matter your industry, no business owner wants to lose money over time due to some invoicing errors. The best you can do is to be mindful of your invoicing system!