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5 Invoicing Tips to Get Paid Faster

5 Invoicing Tips to Get Paid Faster

When it comes to your business, you need to cut down on wasted time; instead, spend your time in ways that improve your cash flow. Chasing receivables can be a huge drain, especially if your practices are inefficient. Here are some important tips to help you get paid faster with less hassle.

Send Out Invoices Immediately

Send out your invoice as soon as possible to encourage faster payments. Customers are more likely to be ready to pay after the purchase, while waiting until the end of the month gives the impression that you aren't expecting a rush on the payment. Be prompt, and your customers will likely respond faster while it is in the forefront of their minds.

Establish a Due Date

Find out what is the common billing practice for your industry and set up your own policies accordingly. You don’t want to be known as the business that allows customers an extra few weeks to pay when competitors are holding their customers to a two-week deadline.

Quit the Snail Mail and Go Green

Not only will you save time by cutting out your paper invoices, but you will reduce waste, reduce cost and avoid confusion with emails. Email invoices are sent within an instant, and copies are automatically kept in your own digital records to help you stay organized. Plus, emails don’t get lost in the mail or accidentally thrown out with the junk mail. They can be set up to let you know as soon as they are opened, ensuring your customers get them quickly.

Send Online Invoices

The tendency when emailing invoices might be to send a PDF file, but online forms are more effective for fast payments. Simply set up an online invoice, and the “Pay Now” button is easy for your customers to click, sending the payment directly to your attached payment service. It is important to offer electronic payment options to reduce time and hassle for your customers, helping you receive payments faster. 

Interest Fees

Late fees will encourage your customers to stay on track with their payments within the expected time frame. It is very important that you’ve already established a clear expectation from the beginning as to when payment is due and what happens after that time frame to avoid frazzled and frustrated customers. Your late fees should be included in your contracts and a very clear percentage that occurs after a certain time. The point isn't to make money through late fees, but to encourage prompt payments by clearly showing the downside in making untimely payments.

On the flip-side of this tip, you could also include discounts for prompt payments. Giving customers a 1 or 2 percent discount for payments within a week or through a certain payment processing service can ensure less hassle on your end for more of your customers.

At the end of the day, you will have to find the right tips for your business and your customers, but many of these tips are likely to work wonders toward a more efficient billing practice. Be sure to establish invoicing habits that increase positive communication and decrease hassle for all parties involved, and you will be well on your way to faster paydays each month.

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Steward Financial

Steward Financial

Jon Osborn is a tax preparer based in San Dimas, California. His company, Steward Financial Services, offers a broad range of tax preparation, accounting and business consulting for small businesses. He loves to work with clients who are looking for answers to complex tax and business planning issues. He has owned several small businesses and worked with over one hundred small business owners. He helps his individual and business tax clients find the best ways to spend their money in order to minimize IRS tax. Small businesses looking to grow, sell or just increase cash flow are one of Jon's specialties.

Steward Financial Services
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