Invoicing certainly isn’t one of the most beloved, fun parts of any business, but it is a necessary one. Even though we don’t enjoy invoicing, we do enjoy getting paid, and since that’s what invoicing’s for – we ought to do it the right way.
One part of the world is especially fond of invoices, and that’s New Zealand. Naturally, what they’re not fond of is delayed payments and impeded cash flow. So, with the help of our New Zealand experts – we’ve compiled a list of valuable tips on how to improve your invoicing process and keep the cash flowing. Let’s begin.
Be Upright From The Start
Before you even begin working on a project or providing a service, you have to discuss payment terms and policies with your client. Be upright from the start. Discuss the cost of the project, preferred method payments, whether there’s an upright fee and so on. All of this needs to be done so that both you and your client are on the same page. In this context, it’s crucial to effectively process accounts payable to ensure that all outgoing payments are managed accurately and promptly. The last thing you’d want is to “surprise” them with an invoice that they weren’t expecting. So, the first thing you need to do to improve your invoicing process is to discuss all financial matters before you even make one. This will make the rest of the job pretty much effortless.
Don’t Complicate Things
Have you ever gotten an invoice or a bill in the mail that was just too confusing to read? Well, we’re sure you did. Also, we’re sure you’ve just left it there on the table to come back to it, later on, to try and decipher it, and sure enough – you forgot about it.
Well, we are confident you don’t want to be on the receiving end of that scenario. The last thing you’d want is for your invoice to get lost in the mail or forgotten. Therefore, don’t over-complicate your invoice. The key is to make it look good but still easily readable and understandable. Your client must be aware of what they’re looking at in a matter of seconds. So, use a standard, simple template and include only the necessary information.
Test It Out
A cool trick to check if you’ve done a good job designing an invoice is to print out a few copies and hand them out to your friends, family or co-workers and ask them for input and feedback. If they don’t find anything wrong with it – you’re good. However, if they do – don’t be too proud to listen to some constructive criticism and make the most out of it.
Make It Stand Out
Design is one of the most important factors when it comes to invoices. Fonts, colours, branding – all of that matters more than you might think it does. Your goal should be to create an invoice that is unmistakeably yours, looks professional and well-made, and isn’t too “in-your-face”.
For instance, keep the colour scheme consistent with your brand and never forget to include a logo on your invoice. Also, unless you really have to – avoid bright red. Bright red on the financial documents often indicates something bad, and you don’t want your customers to feel threatened or extorted for money.
The bottom line is – make it stand out, but in a good way. And, don’t worry. It doesn’t matter if you’re creative or not.
Include Relevant Information
When choosing an invoice template, you have to find the one that displays all the necessary and relevant information. For instance, when choosing an invoice template for New Zealand small businesses, you’ll want to make sure you find the one that allows you to automatically calculate the totals of your invoice by including all the necessary data like item price, quantity, GST and so on. Billdu offers a number of free invoice templates that can be used, so make sure to check it out.
Furthermore, every invoice should contain the following information and items.
- An invoice number – the issue date or the date the invoice was created
- Due date – the day upon which the transaction must be realized
- Business details – address and IRD number
- Customer details
- Name of the product or the service provided
- Pricing – the item price, quantity, GST percentage etc.
- Bank details
You could include some other optional items, but at that point, you’d be risking overcomplicating things, and we’ve already said you shouldn’t do that.
Always Use Specific Due Dates
When it comes to the due date – the worst thing you can be is vague. This leaves wiggle room for your client to postpone or avoid paying you. On that note, never be vague when it comes to the due date. A deadline must exist. This allows you to carefully plan your finances and possibly even charge more in case the client is late on a payment. But, most importantly, a clear, specific due date eliminates the element of confusion.
Many set the due dates to “two weeks from receipt” or “immediately upon receipt”, or something along those lines. However, none of those work. The first one is too vague and hard to pinpoint, and the other one is just too abrupt and unprofessional.
Instead of doing that – set an exact date for a deadline. Ideally, you’ll want to set it somewhere between 7 to 14 days after sending the invoice. This leaves more than enough time for your client to prepare the funds.
Include Late Payment Charge
The best way to make sure you always get paid on time is to add a penalty for late payment. A late payment charge is a brilliant motivator for irresponsible clients. Generally, the typical fee is around 5%, but you could also set an exact fee to make a more significant impact.
Sometimes even a late payment charge isn’t enough to make a client pay on time, so instead of waiting for them to be late – send follow-ups and reminders. If the due date is two weeks from now on – you should feel free to send a reminder after seven days, and a day before the deadline, if you still haven’t received the funds.
There you have it. Stepping up your invoicing game isn’t that hard, right? You merely have to follow a few of these tips, and you should be golden. Hopefully, you’ve found this helpful.