One of the most stressful times for most small business owners is when cash flow becomes tight because payments are not settled by customers. Not necessarily that your business has had a hard time, but because your customers are not paying on time.
In this billing and payment guide, we want to share with you some best practices for billing your customers. Plus, we want to share ways to make sure you get paid on time so you don’t have to worry about cash flow.
Use billing software
There are several advantages to use best invoicing software for small business. For starters, it shows your clients that your accounting process is professional and organized. They’ll also know they can’t go through the cracks and miss a payout.
On your end, you’ll be able to easily track special promotions offered to certain customers, how quickly or slowly customers tend to pay, overdue bills and much more.
You will also be able to run detailed reports to help you when customers are interested in their billing and payment history. You can also run these reports when customers dispute the amount of products or services they received versus the amounts they were billed.
Discuss billing details at the start
When you start working with a new client, it is a good idea to have the billing details confirmed as soon as possible. Some customers will delay paying an invoice just because something is missing, like a purchase order number. Here’s what you need to establish up front to ensure future billing success.
Know what information you need to provide to customers.
Does your client need your SIRET number at the start of the collaboration? Does your customer want a specific project name or order number on each invoice? Does your customer have multiple business addresses and needs a specific billing address for proper routing? Find these things so they don’t have a legitimate excuse to delay payments.
Know how your customer wants to be billed
Most customers are happy to be billed online by email. But some still want the hard copy to be mailed. Make sure to send your invoice accordingly.
Know who should receive the invoice (and who should be copied).
Different customers have different rules when it comes to billing. Some invoices need to be submitted to the business owner for approval and then flow through to accounting. Others have to go to accounting with a CC to the project manager you are working with so they can send their OK to accounting.
Occasionally you will have a customer where the invoice needs to be sent in PDF format to one person for approval. Then it must be sent to another person for approval. Finally, it must be sent to an external accounting department electronically.
Clearly define your terms
Surprisingly, some people do not specify the terms of payment. They simply leave the defect upon receipt of the invoice. If your payment terms are not due upon receipt, you must change them accordingly on your invoice through best invoicing software for small business. Otherwise, people will assume you haven’t changed the default payment terms and create their own payment terms.
Speaking of payment terms, one way to make sure you get paid before you do the job or ship the product is to offer a prepayment discount. Your customers will love the opportunity to save a little and you’ll love the fact that you don’t have to worry about getting ripped off.
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