During the holiday season, you’re likely to create and send more invoices than any other time of year. You rely on the cash from these orders to carry your business into the new year, and you want to be sure payments arrive on time. Follow these eight invoicing best practices to keep billing flowing smoothly throughout the holidays.
Stop Using Paper Invoices
Paper piles up fast during the holidays for you and your customers. Printed invoices can get set aside, buried, or lost in the shuffle, leaving you to follow up or take a potentially serious loss when payments don’t come through.
Switching to a digital invoicing system delivers payment details to customers’ inboxes, making it much harder for the information to disappear. Digital options can be linked to the systems you already use to manage payments and inventory and can also be configured to automatically generate, send and collect payment on invoices. You can also set reminders to be sent at regular intervals so that clients don’t forget to pay as their schedules get busier.
Make Your Invoices as Simple as Possible
Invoices containing too much or too little information about orders can confuse customers and make them hesitant to pay. You either wind up dealing with late payments or have to field phone calls to clarify the information. Avoid both by itemizing products and services and clearly stating all costs. Use a logical and organized format in which it’s easy for customers to see exactly what they’re paying for, including associated taxes and fees. Include short descriptions if necessary, but avoid crowding the invoice with excessive text.
Allow People to Pay Using a Range of Different Methods
Providing diverse payment options gives customers the choice of paying in whatever way is most convenient. Credit cards and debit cards are popular options for quick payments, so make sure your business accepts all major card types. Many people also appreciate the ease of digital payment gateways like PayPal. However, even in today’s technology-driven society, the options should include a few “old school” methods like checks and phone payments.
When customers have multiple choices in the ways they can pay, they don’t have to delay making good on an invoice. Payments can even be made on the go through PayPal and other digital platforms.
Create Invoicing Policy Agreements
If clients don’t know when you expect payment on an invoice, you can’t reasonably expect to receive money on time. Every invoice should clearly state the terms of payment and the latest date at which you’ll accept cash before applying penalties.
Your invoicing policy should also include information about fees for late payment or incentives for paying early. Offering an incentive increases the likelihood of getting your money on time or even ahead of schedule. Late fees discourage clients from waiting until the last minute to send payments.
Consider an Integrated POS System
Point-of-sale (POS) systems upgrade your invoicing and payment process by providing one central platform for handling transactions. The newest options integrate directly with popular accounting and invoicing software, such as Xero and Quickbooks, to send order information in real time. When the POS system processes an order, an invoice is created immediately. Inventory is updated, and your records instantly reflect new information about a customer’s sales history and accounts receivable.
Given how crazy the holiday season can be, it makes sense to switch to an integrated solution for sales and invoicing. You’ll spend less time creating invoices, have an easy way to keep track of payments and minimize errors in data transfer.
Use Invoice Reference Numbers
Once the holiday rush is over, how can you be sure you received every payment for which an invoice was sent? How will you be able to pinpoint which customers need reminders and follow up on these specific orders? Establish a numbering system for your invoices, and keep track of these numbers in your files for future reference.
Numbered invoices are easy to file, easy to find and easy to refer back to. Clients can quickly pull up their orders when given the number, making the resolution of late or unpaid invoices much faster. Using a number system also simplifies the paperwork for you and your clients come tax time.
Always Send Your Invoices on Time
If you want invoices to be paid before the terms are up, you need to set a good example for your customers. Waiting to send an invoice says you don’t care much about punctuality and aren’t in any hurry to receive your cash. It also gives customers time to get distracted by the holiday rush, and they may already have forgotten about the order by the time the invoice arrives. If too many invoices pile up on your end, you could be the one who forgets to ask for payment and wind up losing important revenue. Deliver all invoices promptly to prevent these problems.
Use Your Invoices for Brand Promotion
Invoices should be considered a form of communication between you and your customers in the same way as emails, direct mailings and online content. Take the opportunity to increase the visibility of your brand by including a logo and tagline along with your contact information. You can even add information about relevant promotions if the details don’t overwhelm the invoice. Emphasize your brand in the colors and layout of the invoice, keeping in mind every one of your communications is a chance to cultivate a deeper connection with clients.
The 2017 holiday season is expected to show a 15.8 percent boost in commerce with a total expected value of $1 trillion in sales. With the average person contributing over $935 to this incredible number, it’s crucial for your business to keep track of invoices and collect payments without delay. Stick to your invoicing strategy and continue to maintain positive customer relationships to avoid problems with receivables during the lucrative November to January sales period.
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