20 Invoicing Mistakes
The biggest issues when it comes to invoicing can be prevented by following this outline.
Not offering various payment methods
Businesses grow faster if we’re able to the sale of our products or services easy and convenient to our clients. This should also apply to invoicing. By offering multiple payment methods for your clients to pay their invoices, the collection process will be much smoother for you as well as your customer. You also want to make sure that it is clearly outlined on your invoice, preferably in the “Terms” field.
Not following up on past due invoices
Typically, the more time passes from time you send your invoice, the more difficult it becomes to get paid. Intentional or not, things get lost and fall through cracks, especially invoices that are weeks old. You must implement an effective collections strategy to get your invoices paid as fast as possible, preferably shortly after services are rendered or product is delivered. Outlining the payment terms is always a good idea but you can take it a step further by sending out reminder emails weekly to all clients with unpaid invoices. If that doesn’t work – time to get on the phone.
Not including a logo on your invoice
Whether you’re in the process of building your brand or if it’s already established, adding a logo to your invoice is a always a good idea. Not only does it help establish your company as a brand, professional and established – it also serves as a good branding opportunity.
Waiting to invoice
The best time to send an invoice is when you complete a project or deliver a product. If you wait longer than a few days, you may forget to send the invoice entirely. Also, depending on your customer’s payment cycles a late invoice may cause your payment to be delayed.
Poor spelling, formatting and accuracy
From spelling errors to incorrectly describing your product or services, this can leave an impression on the customer.
Make sure that your amounts are correct and that they are in the right currency. The last thing you want is to get paid the wrong amount or receive payment in the wrong currency. This can all add to payment delay 🙁
If you’re invoicing someone for website design, don’t just add a line item with website design and the amount, instead – describe the most important factors behind the service that will justify the price. If you were selling them the product, you wouldn’t just say “Website Design” and a price right?
So to prevent looking unprofessional and hinder your chances of getting paid, check it multiple times and make that invoice content perfect!
Not including terms on your invoice
The “Terms” section should be used to remind customers about payments, refunds or any legal information. If there are policies associated with your invoice, we recommend adding them here. Even though there is a due date on the invoice you should always fill in, it’s a good idea to remind customers of payment expectation and mention payment methods in this section.
Not itemizing your invoice
Whether you’re billing for a product, service, flat fee or at an hourly rate, it’s important to include a detailed description of every line item fee. Your clients might not remember exactly what you agreed upon so make it easy for them to understand what you are billing them for in order to prevent payment delay and confusion.
Without turning your invoices into novels, the more information – the better 🙂
Sending unprofessional looking invoices
The way your invoice looks is important. Clean and elegant is recommended so it doesn’t confuse your customer with unnecessary graphics. Make sure to have you contact information and address spelled correctly. This is pretty simple with the new new version of Invoice Maker PRO. You can select one of five templates and add your information once so you don’t have to worry about adding it again while maintaining the professional look and feel of your invoices.
Including unexplained fees
Customer bill-shock is not good for business. Nobody likes hidden fees. Make sure that if there are additional fees that they are itemized and explained to prevent confusion. The last thing you want is for your customer to loose trust because of a clerical error.
If you have additional charges that were not discussed in the initial estimate of your project, try to get approval via email so that you have a paper trail.
Not adding a payment due date
Every invoice you send should have a “payment due by” date. This should be an actual date and not just a “30 days upon receipt” because that deadline is easy to forget.
You can also consider giving clients a small discounts if they pay early (good place to add this is in the notes section) or you can add a late fee if they pay past the date to encourage timely payment.
Sending invoices to the wrong person or department
It could be human or technical error, invoicing mistakes definitely have big consequences for your business in more ways than you might think.
Make sure that you are sending invoices to the right person or department. Failing to do so will seriously slow down the payment process. This usually happens when billing out large companies, so to prevent this – contact the company and get an understanding of who i responsible for payments and send the invoice to them directly. Make sure to direct any communication regarding payment to that specific person or department.
Invoicing mistakes happen and business owners sometimes send invoices to the wrong companies. This can be a serious problem as the company who receives the inaccurate invoice might consider this a breach of confidentiality and begin worrying about if you’re sending their invoices to the wrong place. This goes back to the point of proofreading, must be done!
Not backing up invoices
Using an automated system like Invoice Maker PRO, your invoices get backed up automatically. Whichever platform or method you use, it is always a good idea to back everything up just to be safe.
Storing customer credit card numbers
Make sure you go with a trusted payment processing vendor who doesn’t have hidden fees.
Forgetting a Remit to address
If your clients are mailing payments, it’s very simple to add a payment stub in Free Invoice Maker or Invoice Maker PRO. All you need to do is make sure that your mailing information is accurate. Any additional details regarding remittance of a payment by mail should be included either in the terms or the notes section.
When they print their invoice, a payment stub will be printed with remittance information.
Not following up on past-due invoices
Unfortunately the invoicing process is not finished once the invoice is sent. Customers don’t always pay accordingly and it’s up to you to follow-up with them to make sure they process payment.
Cash flow can be as hard as lack of sales. It can stop the growth of your business in it’s tracks. Most business owners focus on sales until that dreadful time comes about when there is large amounts of receivables and no money to pay the bills. Don’t get yourself in this situation by aiming to get your invoices paid within 30 days of issuance.
Not sending invoices
This is a pretty simple one but nevertheless the most important one. You can’t get paid unless you send an invoice. Set your business in the right direction by focusing on accounting as much as you focus on your product or service. No matter how great your product or service, if your invoicing and receivables is out of line – your entire business model may fail.
Sending an invoice that does not follow your customer’s invoicing procedures
Usually larger companies have specific procedures with how they pay their vendors invoices. Some companies might have three or more people approve an invoice before it gets paid, which take quite a bit of time as it is.
Not following their procedures can make your invoice and payments fall through the cracks. Prevent this from happening by understanding their cycle of accounts payable and stick to their procedures.
Not including information required by customer to process payment
This could be as simple as not including a PO, Job or Project number or description. Each customer is usually different in the way they approach this process so make sure to communicate with them before you send out your invoices to prevent payment lag.
Make it VERY easy for clients to pay you
How do you accept your payment? Can your clients pay online? Do they have to mail you a check?
Make is as easy as possible for your customers to pay you for your work. From credit card processing, to direct bank deposits to checks – offer as many methods as possible but make sure they are safe, easy and efficient for both you and your customers.
Not setting initial expectation
Without correctly defining and outlining how your business will deliver products or services to your clients, your invoicing efforts might become a struggle in the future.
Try to clearly set milestones for delivery and payment or deposit deadlines. Try not to get in the habit of “I got the job and I’ll deal it with it tomorrow”.