Waste of time, lack of cash flow, bad reputation, and stressful times: are only some of the consequences due to invoicing mistakes small businesses usually made. In many cases, this happens because owners don’t have the right knowledge to manage their accounting and invoices process or because they think that this task doesn’t require their full attention.
Remember: cash is king for the success of your business. In fact, according to U.S. Bank data, 82% of small businesses fail because of cash flow mismanagement while 29% because they run out of cash.
Here’s a list of the 10 invoicing mistakes small businesses need to avoid to continue their activities without any constraints.
1. Saying “I’m not used to new technologies” to continue using a paper-based system.
Nowadays, there are no longer excuses to continue using a paper-based invoicing system: switching to an automated one will help you to save time, money, and.. trees! In addition, it becomes easier to track and manage your invoices, while the system allows you to set up recurring payments, send out reminders for your customers, and backing-up your invoices history.
2. Being overwhelmed by work and forgetting to send your invoices.
Does it seem trivial? Not at all. Because of many business commitments or just because you made a deal with a client or customer. Try to focus on the importance of cash flow for your business and make invoicing a priority and responsibility that you must not forget.
3. Lying to yourself and putting off what can be done right NOW!
Try to forget the words “tomorrow I’ll do it”; if there is something owners can’t afford is procrastinating on relevant tasks, like sending invoices after having completed a project. Unless you have taken other financial arrangements with the clients, don’t wait.
4. Sending the invoice to the wrong person
Usually, the person with whom you discussed the project isn’t the one responsible for paying invoices (this happens mainly if you are working with big companies). In order to avoid being left behind, always ask for the name and contact of the individual responsible for bills payment. Even worse, try to imagine if you accidentally send the invoice to the wrong client. Besides being unprofessional and embarrassing, this can mess up your relationship with the client.
5. Forgetting to put a due date on your invoices
It’s a psychological process! Your clients will be encouraged to pay faster if you put some pressure on them. Moreover, you’ll be surprised at how short payment terms get you paid more quicker! On the other end, avoiding putting a due date on your invoices gives your clients freedom and the “power to choose”.
6. Using vague language when writing down an invoice
The rule is the same for everything: try to be clear as you can. Be sure to include clearly the description of the items, prices, and quantities and avoid unnecessary information. Additionally, as reported above, remember to put clearly the due date and the consequences if the terms are broken.
7. Assuming that a handshake is enough
Markets and the economy nowadays are such unpredictable worlds: nobody knows what’s going to happen from one day to another! Signing a basic contract even if your relations with a client are good can be your lifeline.
You don’t want to find yourself in a situation where a deal goes wrong without having a piece of paper to use in your defense, don’t you?
8. Forgetting to keep track of past invoices
Managing all your invoices by yourself can be pretty frustrating when you have a lot of work to do. That’s why sometimes you can’t have a clear overview of paid invoices and the ones still pending.
An automated system can help you to prevent awkward situations such as sending duplicates, data loss, or missed payments. An automated backup is vital for your business!
9. Offering one payment method only
If you want to get paid on time, you need to make this process as easy as possible for your clients. Allow flexible methods of payment, such as credit card or bank deposits will assure you of time payments for your invoices. No excuses: today with a smartphone we can do everything!
10. Underestimating the importance of personalization
Adding your logo, your brand colors, and your template, for example, give you a professional-looking and differentiates you from other competitors.
Invoice Berry gives you the chance to choose between many different templates!
Moreover, remember that while sending the invoice to your client you can include also marketing materials such as special offers, incentive deals, or the launch of a new service or product!
Still not convinced? Discover more on how our innovative automated system can help you to simplify your daily work and prevent you to make crucial invoicing mistakes!
