By Dimitar Stojanov
Managing your financial documents and data can take time. And I mean a lot of time. Unless you’re a big company and have an accounting department or you can afford outsourcing the paperwork, you’ve probably spent too much time sorting out your invoices, expenses, bills, etc. And for small businesses and even freelancers this can be quite a burden and time consuming task. But everybody knows money is the lifeblood for any business and neglecting this “boring” paperwork can lead to reduced cash flow.
So how do you decrease the time spent on your invoices while maintaining positive cash flow for your business? No doubt that your invoices should be client friendly and look professional (check these 3 free invoice templates!). That will ensure the quality for your business and services you offer. Yet this won’t stop the bureaucratic process of preparing invoices and collecting payments and here you can lose precious time. One cure for this pain is to automate as much as possible of the invoicing and billing process, so below are listed few simple steps on how to achieve that.
Use Invoicing Software
OK, this might sound plain obvious and I agree, but I also believe there are still businesses out there who are making their invoices by hand. And when I say use invoicing software I don’t just mean use computer to make and store your invoices. Yes, Word and Excel invoices are still widely used and probably one of the most popular ways to create invoices. But when managing several clients this can pretty quickly get out of control. Switching from one document to another and checking a spreadsheet to see who owes you what will for sure waste a lot of your time.
If you really want to solve your invoicing pains than using online cloud-based invoicing solution is the right thing for you. That way you’ll get centralized system from where you can create and manage invoices, clients and taxes. You can instantly see who owes you and you can even send invoices instantly via email avoiding all that traditional snail mail method. Small Business Bonfire has already put out a comprehensive list of 81 online invoicing services for small businesses where I’m sure you can find the right solution for your invoicing struggles.
Of course some of you won’t be comfortable giving financial data to a stranger, but well established invoicing services are no different than online services like eBay or iTunes. And if you need more information on security you can always ask them how they transfer and store sensitive data to make sure everything is fine with your requirements.
Use Estimates to Improve Your Flow
Estimates can play big role in winning business with new clients so you have to make sure they are easy and fast to create. How many times you offered free quote for your services? But you know most of the time they are not really free. You notice the time spent tailoring them for that specific client who may never chose you for the job. And that time can quickly add up.
You can easily improve the flow by finding simple ways to duplicate quotes so you can quickly change the required fields for the client. One of the best things when using online invoicing software is the ability for your clients to accept or decline the estimate almost instantly. That way you’ll have immediate feedback if you need to negotiate further. Another timesaver and painkiller is the ability to convert your quotes to invoices without the need to copy all data from scratch. Picture to yourself how fast your invoices will pop out that way.
Schedule Your Invoices
Imagine a situation where you can prepare your invoices in one go and schedule them to be sent to your clients on the date you want. Wouldn’t that be awesome? But don’t lie to yourself if you think you could manually track this. The whole point was to spend less time on invoicing, and manual tracking won’t help you with that. For this kind of scheduling you’ll definitely need some kind of software application (see point number one above) that can do it for you.
Proper invoice scheduling can be crucial in automating your invoicing and billing. This is a huge time saver and will compress all invoicing paperwork in 10 minutes or less per week. I’d like to call this “set and forget” invoicing method, enabling you to concentrate more on the real work and growing your business. So it’s highly recommended to automate as much as possible in your invoicing process, which brings us to the next point.
Automate Your Reminder Follow-ups
Reminder follow-ups about due invoices are very common, and if you have many clients you may find yourself spending more time calling your clients rather than doing real business. Nobody likes them, but every business has a client who won’t fulfill their part of the deal on time. Collecting late payments are important and vital for every business as they will ensure the positive cash flow, the driving force for your company. No matter how uncomfortable this sounds you have to accept it as part of the job and email or call your clients asking for payment.
Just like invoice scheduling this will be probably one of the main solutions for your invoicing hustles. Together with the invoice scheduling they build the foundation for optimized invoicing. By this I mean, you don’t have to spend any time watching over your invoices, which one are approaching the due date, which are overdue, how long they are past due, etc. For some businesses auto follow-ups are the main reason why they choose invoicing services like FreeAgent, Invoicebus*, Harvest, QuickFile and Debtonator for Xero.
Accept Payments Online
This is not actually related to preparing your invoices like the other tips mentioned above, but is nonetheless one important part of invoicing you should take care of. We all know the old way to pay invoices, your clients go to the bank and pay the amount there and after several days (if paid promptly) they appear in your bank account. But combine this with the late invoices and you could get in a situation of waiting weeks or even months for payments to arrive. Did you remember what I said before about the cash flow, the lifeblood for your business?
To avoid this scenario it’s best to make everything simple for your clients. The simpler the better. That’s why it is good to include payment links directly on you invoices and encourage your clients to pay through them. That way you’ll pump cash directly in your bank account keeping your business always fresh. There are several payment services that are easily integrated in almost every modern invoicing system from the well-known PayPal to Stripe, Authorize.Net or PAYMILL. If you think this is the right thing for your business, then I definitely recommend you to check them out and start accepting online payments for your invoices.
* Disclosure: I’m one of the guys who run Invoicebus.