How to Avoid Delayed Invoicing

Jun 25

WHY IS THE INVOICING PROCESS SO DIFFICULT, AND WHY ARE SO MANY BUSINESS OWNERS FALLING INTO THIS SAME TRAP?

I THINK THE PROBLEM IS TWO-FOLD:

1. Invoicing takes time and resources…two things that are not in abundance for small businesses.

2. You feel guilty for finally sending a late invoice because you should’ve sent it weeks or even months ago. So you just let it go. Trust me. I understand the urge to want to do this! But at the end of the day, you provided a service or product, and you are owed for that! Do NOT feel guilty for requesting payment. If you’re worried about the optics of invoicing late, don’t. I have never received a quality service or product and refused to buy again because of delayed invoicing. Don’t doubt yourself. If you’re confident in the product, then send a friendly reminder to the purchaser. “Most” people are aware that they owe someone money. They will simply just wait until they hear from you before paying.

Accounting mumbo-jumbo can be confusing, and lets not forget boring! (My non-accountant friends remind me of this often.) So don’t let me lose you when I use the words “accelerate your receivables.” What do I mean by this? Simply put, I mean get your money honey! Go through all past-due invoices and send reminders. This almost always provides you with a boost of cash!

HERE ARE SOME IDEAS FOR WAYS TO AVOID THE LATE INVOICING TRAP:

· Invoicing software can be extremely helpful! For service providers, I like Freshbooks and Quickbooks if you’re sending 20 or fewer invoices per month. For retailers you probably need something more robust with point-of-sale capabilities as well. Square is an example of one of these systems.

· Consider bringing on a part-time bookkeeper. If you’re spending hours invoicing, chances are that you can spend that time generating income for your business. Pass it off to someone who will be able to concentrate on that task only.

· On a MONTHLY basis, run an Accounts Receivable Aging Report (eww gross, accounting words. Sorry.) If you’re using an invoicing system you should be able to run a report that shows you a list of all past-due invoices, and it will show you how long they’ve been outstanding. These systems also usually have a function for sending “reminders” with just a few clicks of a button. You would be surprised at how many people will send in payments based off of reminders!

I hope you found this helpful! And as always, email me with you questions!