How to Manage Invoices & Payments for Your Small Business

June 17, 2021 Written By Darshit Parmar

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As a small business owner, one of the important tasks you perform is preparing invoices, and invoices are the first step in building the income your business needs to run smoothly. When small business invoices are done correctly and professionally, sent promptly, and followed up regularly, your cash flow will be healthier.

What you don’t want is to have a slew of business invoices that are not getting paid. Implementing good invoice habits and a billing process helps make sure you are not sitting on any unpaid invoices and reduces the need to maintain records of late payments for you to follow up on.

However, good billing and invoicing makes it easier to send invoices, receive payments, and see helpful reporting, so you are aware of overdue invoices and know who you owe you. Having detailed customer invoices also helps you avoid disputes with clients about what they are paying for and when. As tax time rolls around, invoices and payment records will help you quickly round up income dates for your accountant.

In this article, we will learn some of the ways to manage your invoices and know how your small business can manage invoices and payments.

Top ways to manage Invoices and Payment for your business

Small businesses that offer credit terms for their products and services need to learn how to invoice their customers, whether they are an individual or a company. These businesses send products or perform services first and let the customer pay later. And the payment is requested via a document called an invoice.

Also read: How adding Digital Wallets help you to boost your eCommerce Store Sales?

Knowing how to invoice correctly and efficiently will cut down on your paperwork and get you paid faster. This will enhance the overall financial management of your small business. Invoices are one of the ways you can impress your customers with your professionalism and timeliness.

  • Make sure your customers aware of your invoices

Yet, many businesses are not guiding customers or acknowledging that they are providing invoices and instead surprise. So, make sure your customers know ahead of time when an invoice will be sent. Also, spell out the charges and personalization along with a bill to avoid confusion.

Your business invoice should match your original estimate and contract, which conveys predictability to your customers. If the invoice exceeds the estimate or the agreed amount, or there are new charges, explain the difference to customers before you send the invoice.

  • Be aware of the payment schedule

You must have a clear payment schedule depends on the type of project you are working on. You should decide how much you will be paid and when. When having small projects, you must send an invoice for the services you have provided.

  • Create a professional invoice

If you use accounting software, there will be an invoice template that you can use to make your invoice professional, or else you can contact an eCommerce development company to design an invoice. The more organized you appear, the more likely you are to get paid. Try to use the professional logo to make your invoice stand out; make sure you have all your own registered and legal details and the contact details for the person you are billing. Always check and double-check that you have got the correct figures in your invoice, including any additional costs and taxes.

  • Make sure your invoice is detailed

In some areas of customer communication, less may be more, but not for small business invoicing. Listing itemized product or services, fees, expenses, costs, and relevant dates not only reduces disagreements but make sure you will be paid what you deserve and that your customer understands the value you have delivered.

  • Include invoice number and contact details

You need to include a unique number and helps to keep track of how many invoices you have sent a client. Also, it is easier to track down which one by searching for the number. Numbering invoices can help your customer find missing invoices and payments as well.

Include pertinent information for your business, or if you have a bookkeeper or other accounting contact, include that person’s name and contact details. That way, if customers have questions about invoices, they can reach out to the right person.

Whenever possible, address your invoice to a specific person, including name, email address and contact number. In the event of nonpayment, you can follow up with a real person instead of a department.

  • Make sure you add a preferred payment method

This is the next thing you need to care about if you want the payment made by credit card, check, payment services, or payment method; make sure you express this on your invoice. Providing an online invoicing option for your customer to pay online with a credit card is the best way to get paid quickly while the invoice is still top of the mind.

Also read: Top 10 International Payment Gateways Worldwide

If you are considering using an invoice service to accept credit card payments, make sure to check any fees you may incur and how often. Research and compare all options before choosing a service to work with. Thankfully, many companies are providing, and they don’t require long-term contracts. You will only pay when you get paid, making your invoicing process much easier both for one-off and recurring payments.

  • Follow up

The last and the most important thing which people often forget is to follow up with the customers. People think that their job end after sending the invoice. Well, companies routinely lose invoices, forget about them or are reluctant to pay them full stop. You will need to follow up. The invoicing tool helps you send automated reminders to cut down the chase.

Let’s wrap up

All in all, invoicing and payment process has to be easy. It is a widely-known fact that some customers will always have more problems than others, but you should adopt a problem-solving strategy, which hits the right target. Having said all this, we suggest you use the strategies mentioned above to manage the invoice of your small businesses.

Need help in managing invoices and payments? M-Connect Media can help you herewith. We have professional eCommerce experts who can help you guide invoices and payment for your store or business. Contact us for more information.

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