invoicing mistakes

4 Massive Invoicing Mistakes to Avoid in Your Small Business

By Uwe Dreissigacker

Most small business owners would agree on the notion that accounting is their least favorite task. Even accountants feel that they are boring. However, in today’s competitive markets it is crucial to make sure that you don’t leave any money on the table due to bad invoicing.

Below I’ve listed the four most common mistakes small business owners make when doing their invoices. By avoiding these invoicing mistakes at your peril you will be able to lower customer queries, speed up payments and increase your revenue.

1. Having Unclear Terms

Using vague language is the worst you could do in an invoice. Item descriptions, prices and quantities need to be clearly stated. Don’t use any ambiguous language or descriptions that could be misunderstood.

Make sure your customer knows exactly when the payment is due and clearly state any consequences or interest on late payments if the terms are broken.

2. Sending Invoices Too Late

In particular very small businesses operated by one person or perhaps a married couple tend to do their invoices on an infrequent basis. A lot of business owners have this old habit of writing invoices on weekends, or even once per month, when they don’t have any jobs to finish. This dramatically increases the time between finishing a job and getting paid for it.

Remember, only once your customer received their invoice they will be able to make a payment. You should aim to send your invoices at the end of every day once the jobs of the day are finished. If this is simply not possible aim for at least two invoicing session per week to cut down payment times.

3. Missing Details on Your Invoices

Depending on your company’s and client’s jurisdiction your invoice will need to comply to certain state and country laws. Always make sure to include the following details on any invoice you send out:

  • Full legal company name and number
  • Office address
  • Your client’s name and address
  • Invoice number
  • Invoice date
  • Any tax numbers required by local law
  • Payment terms
  • Contact details so your customer can reach you if anything is unclear

4. Not Using Your Invoices as a Marketing Tool

Most businesses see invoices simply as a tool to get paid. While this is surely the major goal of sending out an invoice, why wouldn’t you use this opportunity to increase your revenue even further?

Unlike most marketing materials such as flyers or email newsletters, invoices are being treated with more attention. Most of your clients will read your invoice very carefully and check whether the amounts, descriptions and services provided matchup. This provides you with a unique opportunity to market to your existing customer base.

Within your invoice you can try to add any of the below ideas in order to market to your customers:

  • Request feedback or a testimonial for the job done
  • Offer a referral incentive for recommending your company to friends
  • Mention the launch of a new product or service at the end of the invoice
  • Offer a discount for a future purchase

If you take the above points into account you won’t only get paid faster by your clients but you can also increase your future revenue stream. Small business owners have looked at invoices as a necessary evil for far too long.

It is time for businesses to take their invoices more serious and put a proactive invoicing strategy into place. You will see the difference in your improved cash flow statement at the end of the financial quarter.

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Uwe Dreissigacker

Uwe is the CEO of InvoiceBerry.com, an online invoicing software for small businesses and freelancers. He’s been running online businesses since his teenage years and is passionate about technology, startups, small business, marketing and travelling. He also writes about these topics for the InvoiceBerry blog.


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