Small businesses need to understand the proper way to invoice clients in order to get paid for their work. It’s important to follow a professional invoicing process to maintain a positive relationship with clients and get paid promptly for your work.
Follow these steps to send invoices in a professional manner and get paid quicker for your services:
1. First Do Your Research
Before starting a working relationship with a new client, do some research on the company to ensure they’re legitimate. Explore the business’s website to understand the products or services they sell and view the employee directory. If you’ve never worked with a particular client before, you may choose to ask for a partial or full deposit upfront; that way, you have some assurance that you’ll get paid for your work. Businesses and freelancers commonly charge between 10 and 50 percent for a deposit, though the amount varies depending on the project scope and the industry you’re working in. Do some research to learn what other local businesses charge for deposits.
2. Get to Know How Clients Prefer to Pay You
The more convenient you make it for clients to pay their invoices, the quicker you’ll get paid for your work. Try to be as flexible as you can when establishing your accepted payment methods. If you offer a variety of ways that clients can pay, they can then choose what method is most convenient for them. Aside from the traditional payment methods, such as check, cash and bank transfer, considering setting up online payments through your website or accounting software. You can even conduct an informal survey to find out the different payment methods your clients prefer to use. Put some thought into your payment deadlines, as well; try to establish payment timelines that are reasonable for your clients, but also ensure you can maintain a steady cash flow for your business.
3. Set Your Payment Terms
Now that you have a better sense of your business needs and the preferences of your clients, it’s time to set your payment terms that you’ll include on all your invoices. That means outlining all the payment methods you intend to accept and the billing cycle your business will follow. It’s important to clearly outline the details of your payment terms on each invoice you send out. You may also wish to speak with new clients about the details of your payment terms before you begin working together, so they’re never caught off guard.
4. Introduce Yourself to Your Client’s Accounting Teams
When your roster of clients includes large companies with multiple departments, you will likely find that your contact for invoicing will differ from your day to day working contacts. If that’s the case with any of your clients, it’s a good idea to get to know your accounting contacts, and always be professional and courteous when you interact with them. Maintaining a good relationship with the accounting team can help get your bills paid more quickly, and they may be more eager to help out if issues ever occur with your invoices.
5. Make and Send Professional Looking Invoices
To get paid quickly for your services, it’s crucial that you send out sleek, professional invoices. You can either use a professionally designed invoice template to speed up the process, or build your own invoice from scratch. Make sure your invoice design is clean and it’s easy to read all the important information at a glance. Here’s all the necessary information you’ll need to include in every invoice you send to clients:
- The contact details of your business
- The contact details of the client you’re billing, ensuring the right person is included as the contact
- Your company’s invoice payment terms
- A unique invoice number for easy tracking and filing
- An itemized list of all the products or services you provided
- The total amount owing on the invoice, including all taxes
6. Be Sure to Be Clear and Polite
When sending out invoices to clients or following up on late payments, it’s important that you always maintain your professionalism, and keep conversations concise and polite. Make sure all the instructions and terms you include are clear, so there’s no room for clients to misinterpret your terms. If a client misses a payment deadline, be sure to stay polite when speaking with them, but firm about your payment deadlines.
7. File Away All Your Invoices
Create a simple and logical filing system for all your client invoices so that you can easily look back on past invoices when needed. Choose a filing system that you’ll be able to maintain. You can either file your documents electronically in a specific folder, or print out your invoices and file them physically. Make sure to sort your invoices by year, and if you file them electronically, create a common naming convention for all your saved invoices.
8. Follow Up On Late Payments
If a client misses an invoice payment deadline, don’t hesitate to follow up with a professionally worded reminder email letting them know the payment is past due. If you don’t receive a response or the payment in a timely manner, pick up the phone and call the client’s accounting team to inquire about the payment, and agree to a deadline by which they’ll send your invoice payment.
9. Consider Charging Late Fees
To minimize the chances of missing payments, you may wish to add a note to your payment terms that includes a late fee policy for your business. You can choose to charge late fees by a percentage of the total bill or a flat fee. Just ensure that your late fees comply with the maximum interest charges allowed in your state.
10. Thank Clients for Payment
Make sure to thank clients when they pay their invoices in a prompt manner. Respond to their payment with a short thank-you email to let them know you appreciate their business. A quick thank you can leave a good impression and even help you land repeat business with the client.