The time has come to stop wasting your valuable time on old invoicing methods that do not produce results. Online Payment Service Due has analyzed over 250,000 invoices, and they found some very surprising trends that affects businesses not just in the U.S. but all over the world. Three of the biggest factors affecting invoice turnover, was a lack of personalization, setting terms clearly, and utilizing quality invoice software.
Let's take a look at how we can stop wasting time on old invoicing methods, and start maximizing our receivable turnover rate.
#1 STOP USING THE SAME TEMPLATE FOR EVERY INVOICE
It is perfectly acceptable to use a template that puts your business information on the invoice. It is UNACCEPTABLE to use a template that does not personalize the invoice for your customer. According to recent studies on consumer interactions with invoices, businesses were more likely to receive payment for invoices
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WHAT DOES A PERSONALIZED INVOICE LOOK LIKE?
A personalized invoice should include the below points. Please note these are not applicable to all businesses as some require more detail and less detail:
A personalized message thanking them for their business (does not need to be long)
Include their logo on the invoice
In the email to the customer, mention your appreciation for their business
In the email to the customer, mention them specifically by name in the message
Tailor the product names (time permitting) to personalize the products themselves
Take small, but meaningful steps to personalize your invoicing and grade the results by how your customers pay.
#2 SET YOUR TERMS CLEARLY
According to the research performed by Due, you are 1.5x more likely to be paid on time if you add your terms clearly for your customers to see. Your terms are the days you allow a customer time to pay you for the products/service you have provided them. Some businesses have their terms set to immediate upon receipt of invoice, some are Net 30 meaning 30 days to pay upon receipt of invoice, and some are Net 45 upon receipt of invoice.
It is important on your invoices to clearly mark the due date of payment for your customers, and to mention that time begins when the invoice was received to avoid confusion. We also recommend setting up reminders for the invoices, 1 week before the final due date especially for 30 day or 45 day due dates as customers can forget about the amount due.
CUSTOMERS ARE WAITING UNTIL THE LAST DAY TO PAY
Let us take a look at the invoicing for you as it sounds like there are opportunities your business can take advantage of. Reach out to us to help better understand if any of the following will help:
Have you considered offering a discount to customers that pay sooner than the due date
Are you terms "payment is due immediately upon receipt", and then not following up
Are there easy ways for your customers to pay the invoice
Is the invoice disorganized and unclear
Have you set reminders to remind your customers near the due date of unpaid invoices
Getting your terms to where you want is extremely important for your invoicing and can boost your cash reserves.
#3 USE BETTER SOFTWARE FOR INVOICING
We have talked about personalizing your invoices, and setting the terms for customers to pay you for your invoices. Something that is often overlooked though, is investing in quality invoicing software. Many accounting software's, QuickBooks, Xero, etc., have their own internal invoicing software management system already pre-setup for businesses to use. The issue comes into play of personalizing and professional appearance of your invoices when you use these software's.
There are several quality invoicing software's available for use that we can help you determine would be best for your ideal situation. Some businesses may be perfectly ok with QuickBooks/Xero internal invoicing management, while others need a more professional invoice management system to handle larger volumes of sales. We have several proven methods to help you determine what the best options are for you, and will work with you to evaluate your needs.
TO SUMMARIZE
Invoicing is one of the most important aspects of running your own business. It takes time, commitment, and data analytics to maximize your conversion of receivables into cash that you can use. Take small steps towards personalizing your invoicing methods, establish clear and discernable terms for your customers to pay, and invest in your invoicing software for better results. Schedule a free consultation today with us so we can help you build a successful invoice management system that will bring you the success you want to achieve.
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