Are invoicing mistakes costing you a fortune?
Invoicing is a complicated process, especially for small businesses. Most freelancers and small-scale business owners can not afford a dedicated accountant employee.
Thus, if you pull your sleeves up for invoicing, mistakes are bound to be made without accounting experience.
Did you know?
Therefore, the only way we can avoid mistakes is by being aware of them.
Say “no more” to the invoicing blunders as we have consulted our accounting experts and listed the 10 most common invoicing mistakes and shared an appropriate solution.
And trust us, not reading this blog till the end would be another huge mistake.
So, let’s get started and learn.
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Whether your business is in construction, landscaping, consulting, photography, auto repair, or the medical field, invoicing takes way too long. That’s why we’re here. InvoiceOwl makes your invoicing faster and simpler so you can get paid promptly and without the hassle.
Table of Content
- 10 Invoicing Mistakes You Must Avoid
- Forgetting to invoice
- Sending an invoice to the wrong client
- Not mentioning the due date
- Not Itemizing services/products
- Calculation mistake
- Not clarifying the payment policy
- Not accepting multiple payment gateways
- Marking an invoice paid before it actually is
- Surprising the client with hidden charges
- Keeping no digital backups
10 Invoicing Mistakes a Business Owner Must Avoid
Forgetting to invoice
Letting your branded invoice fall between the cracks is one of the most common and biggest mistakes. How can you expect the client to pay you when you have not even invoiced them.
Many business owners forget to invoice because they are managing multiple projects simultaneously. And some see it as a tedious task and just keep procrastinating on it, which hinders the positive cash flow.Solution:
Make a habit to invoice clients at the same time the project ends. Or, the best solution is to use a brilliant invoicing app, such as InvoiceOwl.
It helps you start sending professional invoices within minutes from your smartphone itself.
Sending an invoice to the wrong client
Letting your invoice bark up the wrong tree will not only make you linger for the payment but will harm your reputation as a brand.
Sending your invoice to the wrong person may reveal your trade secrets or the custom discount rates to the wrong person and you end up losing their trust.Solution:
Double-check the client information (client’s legal company name, company logo, contact number, office address, and email id) mentioned on the invoice before sending it out.
And if you want to rest assured, the InvoiceOwl app ensures that the same client receives the invoice on the same day. By managing the client details easy and efficient, It automatically fills up the correct email id eliminating any spelling errors.
Not mentioning the due date
The due dates are crucial to get you paid on time. It encourages the clients to pay you in a timely manner. It lets the client know when you are expecting them to pay you.
Moreover, if you do not mention the last date to pay without the late fee, you can not charge the clients a late fee.Solution:
Always mention the payment terms. ‘Payment terms’ is the time limit for the customer to pay after the invoice. So, even if you forget to mention the last paying date, the client knows the time they have to pay you to avoid the late payment penalty.
Automation of such repetitive tasks is the best solution. Therefore, pick an account payable automation software like the InvoiceOwl app. It automates the entire invoicing process and you will never issue invoices with such missing details.
Not Itemizing services/products
Itemization of all the products and services sold helps the customer understand the total amount. And many professionals do itemize the bill but just mentioning the line items is not enough. You should describe every item with rates, quantity, and cost.Solution:
An itemized invoice is necessary and tedious to create. Thus, use the online invoicing software — InvoiceOwl to add line items while creating invoices with just a single click.
It remembers all the products and services you provide and adds the description automatically, which helps you to get paid faster.
One of the most common invoicing errors is silly calculation mistakes. When you have to add multiple line items, taxes, and discounts, it is quite natural to make common mistakes. After all, we are not computers.
Invoice calculations can get complex at times, and what is better than letting the computer handle the calculations? As they stamp out the room for human error.
Therefore, to create precise and accurate invoices, download the InvoiceOwl app. It figures out the final amount to be paid and you just have to verify the invoice.
Not clarifying the payment policy
Not clarifying the payment policy can bring you a lawsuit against your brand. Many businesses don’t feel the need to mention tacit information such as payment currency or refund policy.
But, by mentioning them, you inform many customers who do not know your payment process policy and protect yourself against any legal actions.Solution:
Payment policies are something that does not change quite often. Hence, writing it every time is not a wise idea. You are only inviting fat finger errors by doing so.
Thus, to avoid such a mistake, use a customizable invoice template to add your policies once and for all.
Not accepting multiple payment gateways
Not accepting multiple payment methods is one of the most common reasons behind the late payments. Your preferred payment option doesn’t need to be convenient for the customers too.
This leads to nothing but a break to the cash flowing into your business.Solution:
To accept a wide range of payment options, download the InvoiceOwl app. It provides a “pay now”, and offers multiple payment gateways, such as credit cards, debit cards, online payments, and even options like Stripe so that the customer pays you effortlessly.
Marking an invoice paid before it actually is
Counting your chickens before it hatches benefits no one. Just because the customer has received the invoice does not mean you are guaranteed to be paid.
Therefore, wait for the money to actually be transferred into your account and only then mark it as paid. And if the clients forget to pay you timely, send reminder emails to follow up.Solution:
To keep track of paid and unpaid invoices, maintain a ledger of all the transactions. Moreover, ask the customer to provide the transaction details in case of a bank transfer.
You can use the InvoiceOwl online invoicing software that keeps track of invoice payments and notifies you in real-time. Furthermore, it helps you generate receipts for the paid invoices too.
Surprising the client with hidden charges
Not discussing all your charges in advance is a big no in the professional world. Do not hesitate to reach customers again if needed to let them know of all the additional costs they have to pay before taking the assignment.Solution:
To avoid such a Himalayan blunder, make sure you send an estimate before finalizing the collaboration. And to generate precise estimates, use InvoiceOwl online invoicing software.
Notifying customers about all your charges helps you win their trust and ultimately get the payment quickly.
Keeping no digital backups
Keeping no digital backups of your invoices makes no sense in today’s world. You don’t want to end up with heaps of paper and wasting paper is not for the environment too.
Moreover, paper-based invoicing makes it hard to sort and refer to an invoice from a few months ago. Whereas, if you have a digital copy, you can track all your business finances effortlessly.Solution:
How strange is it that a simple solution can resolve such a huge issue? Like all the other invoicing issues, all you need to do to avoid this one is, download the InvoiceOwl invoicing app and it will take care of your invoices.
It not only stores your invoices on the cloud but your templates too with a unique invoice number assigned in a sequential numbering system automatically.
What happens if an invoice is incorrect?
If an invoice is incorrect, it may lead to delay in payment, no pay, brand image menace, or even a lawsuit.
How do you solve an invoice problem?
To resolve an invoice problem or an invoicing mistake, you can cancel the invoice by using a credit note. This way you can legally stop an invoice from getting overdue and balance the accounts.
Is it legal to change an invoice?
No, it’s not. You can not change an invoice that has been agreed upon. The only exception that allows you to modify an invoice is to correct an invoice mistake.
What is the impact of processing an invoice with an incorrect invoice date?
Processing an invoice with an incorrect invoice issue date can make you pay more in late fees, or even mess up your annual tax numbers too. The invoice might even get lost when sorted chronologically.
Create Professional Invoices Online Easily and Keep On Top of Your Finances
InvoiceOwl is a feature-rich invoicing app that helps small businesses, freelancers and contractors to create invoices on-the-go and get paid quicker!
As they say,
“Precaution is better than cure.”
We must prevent invoicing mistakes from occurring in the first place. And for that, we need to be mindful of the common billing errors.
So, today we discussed all the most common goof ups. And as we discussed the solution, we found a simple yet complete solution for all the mistakes. Which is, InvoiceOwl— one of the most popular invoicing apps.
What are you waiting for?
Download the app now and guard your invoices against glitches.