Setting Up an Invoice & Invoice Etiquette
Invoice Etiquette For Small Businesses
As a small business owner, there are different ways of setting up an invoice & invoice etiquette that you can suggest to your client to make an invoice payment. This way, you get paid fast for the service you render and also attract new offers from existing customers.
You should choose payment options while sending an invoice that will benefit your business, and they should be listed on the invoice you create. This reduces miscommunication between you and your customers.
Here are the different payment options:
There are several payment methods your business can accept to receive payment for services you render after sending an invoice. Before that make sure, you have clearly mentioned your business name and contact information. Listed below are some of the payment methods that are common with a small business.
Cash is one of the least secure payment options for an invoice, and it is one such payment method some business owners can’t do without. If you operate a brick-and-mortar store, for example, cash is one of the preferred payments for your business, since there are no extra charges and processing time.
This is another means of making payments for businesses along with payment terms. Cheques are less prone to get loss and theft and are readily accepted and deposited than cash.
Although, cheques are not secure too as the depositor may release a bounced cheque if their account balance is insufficient. Bounced cheques can affect the business owner and lead to debt. Some cheques take too long to get cleared, so you have to be patient to access your money.
- Credit Cards
This is one of the simplest means of making payments, and it comes with higher security measures, following all the business processes. Credit card payment requires the business owner to first set up an account through a service provider or merchant bank. You will be charged a fee for every transaction made into the account when you accept a credit card payment.
- Bank Transfer
This method is also known as ACH credit transfer; with this, you can order a direct transfer from your customer’s account into your business bank account. You’ll have to share your customers with your banking details for them to make a bank transfer, such as the account number and routing number.
This payment method is one of the simplest means of accepting payment for your service, as it is free and fast. It is one of the most secure options too.
- Online Payments
Payments can be made online either with debit or credit card, and it allows customers to pay their invoices fast and safely. To get paid through online payments, you need to set up a payment gateway online like Stripe or PayPal.
- Mobile Payments
Mobile payments are an easy option for most businesses and are widely used, especially among contractors, engineers, and on-site workers. To receive mobile payments, you need first to have a payment reader.
The payments are processed on the mobile app and are fast. You’ll receive the money in your bank account within days, and it also attracts a transaction charge for every payment made.
- Automatic Payments
Some clients pay a fixed amount on an agreed date, and these payments can be accepted automatically through recurring payments. It is fast and safe too.
With the customer’s consent, their account is charged a fixed amount on an agreed date that can be weekly, monthly, or every quarter of the year. Automatic payments can be accepted through accounting software and an online payment gateway.
Choosing Your Preferred Payment Methods
Every available payment option for small businesses has its pros and cons. Before choosing, you have to research each payment method and select the one that will benefit your firm and the customer. You’ll find these considerations helpful to decide what payment methods fit your company.
- Cost: While you’re analyzing each method of payment, focus on the cost you need to take it up for your company. Card transactions always attract a charge each time you accept a payment. Also, additional costs tagged with the payment method should be considered. A payment method that requires hardware will attract more cost.
- Security: It is crucial to consider the safety of your payment method before using it. This is essential for you and your customers. Cash Payment has a high risk of loss and theft and is considered a low-security method of payment. Online payment, on the other hand, has a high-security level and comes with encryption to secure your client details and make sure that you get paid.
- Convenience: The ease of making payments without encountering delays is underrated until you have a little issue making a deadline payment in getting paid. Every payment method has its level of ease. To make check payments, the depositor has to visit the bank to deposit the check, after which a hold will be placed on the payment.
- Client Preference: Your clients’ choices should be considered when you’re selecting your payment method for getting paid. You can start by asking what payment method they prefer to use when you have a meeting with them, or you could draft a survey for them to answer via email on how they wish to pay for your service maintaining invoicing etiquette.
Invoicing Etiquette for Small Business Owners
Sometimes, it is a hard task to get the client to pay, compared to completing the job. Tracking overdue payments and telling the client to do the right thing is not so easy. At times, you feel you have been deceived. There can always be a way to get your payment from customers like this. With a working invoicing etiquette, your clients can abide by the rules to maintain a good relationship by paying the bills before it gets late.
You are going to benefit more from it by gaining the customer’s trust and also build a lasting relationship with them while following invoicing etiquette.
Here are 7 Helpful Tips:
Use The Best Software for Your Business
Your invoicing etiquette game should be strong, and when dealing with every client to achieve this, you need a reliable online invoicing tool. The software will be responsible for taking care of financial and invoicing demands. One of the best invoicing software for small business owners is InvoiceOwl.
It has been designed to help your firm improve by generating and sending out invoices, and also help you with necessary follow-up on any client that is issued an invoice to pay on time following invoicing etiquette.
Set Clear Terms and List Your Services
When customers receive an invoice from you with appropriate invoicing etiquette, they shouldn’t be surprised to see what wasn’t discussed beforehand in it. An invoice sent should contain what the client is expecting, like the total amount they are going to pay, and the due date as agreed upon by both parties without having late payment charges.
Your cash flow will not be interrupted, as well. In the invoice, the most important thing to include is the cost of service you’re supplying them. An invoice with costs unaccounted for will make the client assume that something is fishy, and they may not be eager to make the payment on time.
Create And Stay By Your Policies
Changes in policies and company laws may cause clients not to trust your services as they used to. Always Everyone loves a smooth process when there are set protocols, but these protocols are not meant to be changed impromptu. Sudden policies will confuse your customers.
If you need to change a law in your terms of services, the client should be notified before you send them an invoice. This little act goes a long way to show them how professional you are in your dealings. You must also make sure that your contact information appears in all the invoices you send out, as it helps to resolve small issues quickly.
You can customize your invoice template with an online invoicing tool. An ideal invoice should contain all your company’s necessary contact information (including phone numbers, company address, email address, and mailing address), and business logo. Your customers can easily reach you through any of those means if there’s a need to do so.
Make Payment Convenient For Your Customers
The best way to make your clients pay for your service on time is by making it easy for them to pay whatever amount of the bill is for the work. Make sure a client sees the available option to pay as a stressful one, they feel reluctant to pay, and this may sometimes lead to overdue payments.
Online payment is one of the easiest and safest means available as your client can pay wherever they are. Some online invoicing software has various gateways for online payment. They can also help you translate the invoice into your client‘s preferred language. With these unique features, you will stand out among other competitors, which will definitely make the client trust you more.
Be Courteous In Your Dealings
While you’re dealing with a client, you have to do so with courtesy. Being polite and honest is one of the keys to securing yourself a long-term client. With politeness, you will pay attention to the client details and go the extra mile in making them satisfied with your service. Leaving a good first impression will make a customer want your service more.
Also, be thankful to your client when you finish negotiating.
Ask for Advanced Payment Upfront for Large Projects
Working on big projects is always a good experience to help you improve your expertise. Although, you’ll have to take your time in executing it and be efficient through the course of the project. In a situation like this, you are free to ask your customers for an upfront payment. The amount you’re demanding should be invested in the same project, and this will help you move faster with the project.
To keep track of all upfront payments you’ve received from your customer, you should send them an invoice of already-made payments and the remaining balance. You can also forward them credit notes through the invoicing software. Invoicing software is efficient in computing costs and drafting out estimates for clarity’s sake. InvoiceOwl Invoicing software is an all-around program that helps you manage multiple tasks and keep track of every other business involved.
Politely Follow-up For Payment Due
Sending invoices is not the only thing you should be good at, as there’s more to sending an ideal invoice. It is your duty to track the sending progress of the invoice, whether it has been sent, received, or has been viewed by the customer. You should remind the customer about the due date for the due amount so that they won’t forget. You can set an automatic reminder for every due amount so that they can be sent to respective clients. With this act, clients will appreciate your professionalism.
Your journey to becoming a successful business person will peak if you take each of the aforementioned steps. Depending on how you take the steps, you’re either getting closer to your dream or edging away if you don’t stick to them. Every small business needs time, hard work, and smartness to get to its peak. With the right tools at your disposal, you’re easily going to achieve your ROI.
Invoicing software is one of the important tools you need to work smartly as it saves time and wasted energy. You can track and manage transactions from a dashboard. Small business etiquette is useful to help set your relationship with clients in the right way. Etiquette also helps your client trust their jobs with you and can also help clients refer you to their colleagues in the same business.
Invoicing with InvoiceOwl, Top Invoicing Software
InvoiceOwl Invoicing software is an invoicing and billing solution that rolled out in 2020 with the most comprehensive features available on the internet and the Invoicing industry.
It can also be defined as an invoicing software that helps business owners monitor and control several business processes, manage expenses, draft an invoice in a custom-made template, follow up invoice progress, and also be useful for financial reporting.
10 Invoicing Habits That Can Make or Break Your Business
With a lot of responsibilities, the most important assignment you, as a business owner, have is invoicing. Cash flow in your business is bound to be unsteady without proper invoicing.
You need cash to keep the business growing and open to long-term offers, and when the cash flow is affected, you need to look into your invoicing process. Invoicing is not only limited to making money from the goods and services you provide, but it also goes beyond that. A good invoicing process will represent your business in front of your customers and can boost the relationship between you and them.
If you send a harsh message to a customer, requesting a due amount in an authoritative manner, you will get paid, but you’re not likely to work for the customer again. Evaluate your invoicing habits to help your business grow.
You Forget To Bill Your Clients
What does this mean? You don’t bother about clients make payments sooner or later, and you feel too relaxed.
As a business owner, you’re making a costly mistake if you act this way. Not reminding your client of the amount they have to make is a sign that you are careless about the service you render them or the goods you’re supplying them. To the client, it means you’re not professional enough, or you don’t deserve to get paid in due time.
To not affect your business cash flow, you need to take invoicing seriously so that your client won’t toy with your money.
You Never Follow-up On Late Payments
What does this mean? You do not care whether you get paid or not.
While you’ve made invoicing the most important thing, it is more important that you follow up on late payments invoices that are due. There are times when the invoice due date becomes overdue, and if you’re not trying to convince the client to pay, they won’t take you seriously.
As a sole proprietor, your role is to keep reminding clients of late payments so that your cash flow doesn’t get affected. You should be polite when reminding clients about the amount they forgot to make, either when you’re making a phone call or sending an email. You can pay them a visit if they’re not too far away. Invoicing software will automatically notify clients about late payments.
For the client to take you seriously, you have to be professional enough and immediately keep track of late payments. In most cases, the client may have forgotten that amount is overdue; it is left to you to remind them from time to time. If the client refuses to pay, you can take further actions by charging them to a small court.
You Follow-up Too Much
What does this mean? You’re extremely intensifying.
When you try to follow up on late payments, you shouldn’t be too pushy or act as a collection agency. Some clients won’t find it friendly if you keep pestering them multiple times a day. They may get annoyed and see you as a desperate person. Such behavior can make a client postpone the amount due date when you continually ask them for the amount.
You are not wrong for following up on late payments, but you should do it moderately.
You Require a Down-payment.
What does this mean? You’re trustworthy, committed, and reliable.
Business owners that demand an upfront amount are known to be very professional at what they do. Sometimes the percentage of payments may not be equal, but you can request an advance amount to start the job. A client sees such a business owner as a committed worker and will likely do more business with such a person. Down payments put you on a safer side if the client refuses to pay the balance.
You Request The Payment-in-full.
What does this mean? You do not trust the client.
This is a fair practice, especially if you have dealt with different clients. You don’t want to be deceived by the client when it is time to send an invoice.
Some clients may get the signal that you don’t trust them, and would not like to do business with you next time, the same way you can’t work with who you do not trust.
It is better to research a client if they’re new prospects. If you still don’t trust your findings, you should start by requesting a down payment.
You Bill Once The Project Is Completed.
What does this mean? You’re trying to be smart.
This is also a fair practice if you’re dealing with a tough client. You’re even right for sending them an invoice once you complete the job successfully.
If the invoice is sent immediately after you have completed the project, the client may think you’re trying to overcharge them. That is the first thing that comes to mind, even if that’s not why you’re sending the invoice instantly.
Another scenario is when you send an invoice immediately, your invoice may not sync with their billing cycle, and you’ll have to wait until they are loaded with enough money to pay you. If you are caught up with clients like this, the best option for you is to reach an agreement with them before you begin the project.
You should both agree on a weekly payment as the case may be, or you can sync their payment cycle with yours to get paid in full when they receive a new payment.
If you use invoicing software, you can set an automatic date that will automatically remind the client of a pending payment they have to make.
You Don’t Use Invoicing Software
What does this mean? You are inexperienced in your business field
In this modernized world, not having online invoicing software will set your business back. Invoicing software will help you create invoices with custom-made templates and help you keep track of every pending payment.
Your business will have an edge if a client sees this level of professionalism in your invoice. If you still buy the idea of generating manual invoices, your client may not take you seriously up till when the payment is due.
Nowadays, much online invoicing software comes with different payment options that allow the client to choose the most convenient payment option when you send the invoice. You can also set due dates for recurring payments so that when a client fails to make a payment on the date, you’ll be notified. They are cloud-based solutions that allow business owners to manage invoices from any location.
You Don’t Have A Written Agreement.
What does this mean? You’re too trusting
If all humans are trustworthy, there wouldn’t be a need for any written agreement. A documented agreement will help you and the client work under certain rules that have been read and clarified. If you have terms of payment for your business, the client has to agree with them for proceeding. A written agreement can help you take action legally against a customer that breaches your laid down laws.
Be aware that there’s no need for complex verbiage when formulating a written agreement between you and your client. It just has to pass a clear message to the client explaining your terms and conditions.
You Rely Mainly On Automation.
What does this mean? You’re lackadaisical and pleasing
You do not have to rely on automation before demanding payment of services.
At times you do not have to rely on automation as this may affect the tour cash flow if you’re managing funds at the time. You should always remind the client to make a payment when they are less busy. Automation will only work on set dates, and as a small business owner, you don’t have to wait for that all the time if you have too many clients owing you.
You can send emails or talk to the clients on the phone to remind them of their due payment.
You’re Not Using Your Invoices As A Marketing Tool
What does this mean? You’re not building trust and relationships.
An invoice is one of the most important tools for your small business and should be utilized to the maximum. Every time you make use of an invoice, you should make it effective with different marketing strategies. When you issue an invoice, you can create a discount awareness, sell other skills you’re good at, and share useful information with clients.
Your business can move far with these little efforts, and you don’t have to run paid ads all the time to gain public attention. The invoice you issue out is a massive tool if only you know how to use it well.