Updated: Jul 7
You could deliver an exceptional product or service as a small business owner, which is a notable measure of your success. But at the end of the day, it’s your bottom line that determines if you’ll survive or thrive in the future. How can you keep a healthy cash flow and add more to your profits? By practicing smart billing and invoicing strategies.
First Things First: What’s the Difference Between Billing and Invoicing?
Many would argue that billing and invoicing are one and the same, but there’s actually a slight difference. Invoicing typically refers to a business looking to collect money from its clients, while billing is a term used by the customer to refer to money they owe suppliers for their products and services. It’s essentially like “potato-potato,” in which one party calls them invoices and one calls them bills. Anyway, back to what you’re here for—five billing and invoicing tips…
1. Use Contracts to Set Payment Terms in Advance
Contracts are essential in that they keep everyone honest and informed from the onset. Be sure you create contracts that serve as a written estimate before any work begins, and spell out your payment terms in advance.
Once both parties sign it, you’re clear on what your terms are and what type of product or service they can expect. Contracts and payment terms also help keep your invoicing system running consistently and expedite payments of customer bills.
2. Assign a Number to Each Invoice
Numbering each invoice not only helps you track what you’re sending out; it helps you find every invoice for quick reference later. It’s is also an easy element to add to your invoicing software.
If you’re just starting out with numbering invoices, it may be a good idea to not assign “001” to your first invoice as customers may associate that low number with a lack of established experience. A good option may be to start your invoices with the year, then assign a number from there (i.e., 2021-101
3. Consider Mobile Invoicing
Obviously, the key to keeping your cash flow flowing is to stay on top of your invoicing. But sending invoices out quickly is often difficult if you spend the majority of your day on the road or on job sites.
The Sidekick experts can help you select a mobile invoice and estimating the solution that’s best for your business. Some tools also allow you to attach voice memos or photos to your invoices or estimates, which comes in handy if before-and-after photos are essential to you generating new or repeat business
4. Offer More Payment Options
In today’s “on-demand” lifestyle, making things easy and convenient is huge. The same holds true for billing solutions. Customers are more likely to do business with you if you make it more convenient and flexible by offering solutions like partial payments or slight discounts for early payments.
On the flip side, you should also implement conditions such as fees for late payments. The more payment options you offer, the more regular payments you’ll receive to perpetuate your cash flow.
5. Automate Your Invoicing and Billing
Who doesn’t want to save time and minimize mistakes each workday?! Those are just two great reasons why it makes sense to automate your invoicing and billing process. There are plenty of software packages available that help you streamline your processes by not having to manually create billing documents and search for customer information. Automation can also help you get big-picture data about your business like cash flow and revenue projections.
Starting a New Business? Hire a Sidekick!
There is so much to think about when starting a new business that has nothing to do with the part of your business you love most. From understanding tax laws to managing payroll, the accounting side of your business can be overwhelming. That’s why Sidekick Accounting believes in helping small businesses with our expert offerings and by educating you on ways you can succeed financially. To learn more, schedule your complimentary consultation online or call us at 414-310-7689.