Invoice Mistakes You Need to AvoidWritten by Uwe on December 04, 2014
The ticket to any business’s success and sustained financial income lies behind its invoicing. It forms that crucial bridge that leads companies to their money. Despite its importance, many companies are still stuck with inefficient invoicing procedures which lead them to cash flow problems, frustration, and confusion. As a start up business, you don’t want to find yourself struggling with financing issues. Are you right now thinking, that sounds like me? If yes, then I highly recommend reading on.
So what can companies do to help make sure they have a healthy invoicing system that their business can depend and survive on? There are some basic errors that most companies make and so I want to make sure you steer clear from them. This is why in this article I will highlight the most common mistakes that people make in invoicing that causes them the misery you might be in right now.
1. Failing to keep up backup
Just imagine if the network or computer system that you are using in your company suddenly collapses due to unforeseen events, what would you do? All of a sudden you have lost all your customer records and now you have no way of retrieving them. How scary does that sound? Not that I intend on scaring you, but this can very likely be you any day if you’re not keeping any backup of your invoices and customer records. I’m sure that’s a scenario you very much want to avoid. So if you agree, the first step you need to take is starting logging all your invoices and important customer data.
The best way forward is to start using online invoicing software like Invoiceberry that stores and backs up your invoices on a constant basis.
If you don’t want to be left penniless due to some unpredictable event, having to start from scratch all over again, the best way forward is to start using online invoicing software like Invoiceberry that stores and backs up your invoices on a constant basis.
2. Sending incorrect figures to clients
You might be thinking why I’m stating the obvious. But the truth is so many people make this mistake, it’s unbelievable. After all we are all only human right? So yes on a busy day where you have a zillion things on your mind, you can very easily make this mistake and end up sending the wrong figures to your client.
One of the things customers hate the most, after getting a bad quality product or service, is being billed incorrectly. Customers do not want to see your inefficiency or human errors and rarely have the capacity to stand it. Have you ever over billed your customer? If yes, you’d know very well what I mean here. Customers will immediately jump to accusing you of trying to take advantage etc. On the other hand, if you end up under billing a customer, the likely thing to happen is the customer will quietly and happily walk away while you have just made a loss. I’m sure both situations are something you don’t want to face in your business.
So start by investing in a good invoicing system like Invoiceberry. These systems are designed to help you keep track of things, be on top of records in a matter of seconds and thus greatly reduce your chances of such human error.
Finally, never forget to double check before sending off an invoice. No matter how busy you are, always take that extra minute to go over your invoice and make sure you have billed your client for the correct amount.
3. Failing to include a description of the products and services rendered
In my experience, one of the biggest causes of delayed payments is simply because a proper description of the products or services rendered was not included on the invoice. Misunderstandings and confusion are very common things. Your customers can either forget the exact products and services they purchased or perhaps due to the nature of the products and services rendered, might simply not be clear enough on what they have to pay for.
For example factors like including deposits, damage charges, VAT, etc can all add to the bill and might be essential for your business. However, your customer or client might have not thought of it or might simply not be aware of those extra charges. If they find that out later after a heated argument with you on why their invoice was higher than they were expecting, they will still be upset on why it was mentioned to them earlier. Either way, you will have an angry customer on your hands. That’s certainly something we all want to avoid no matter what the nature of our business is.
So the third step you need to take to avoid invoicing mistakes is to start by making it a habit of always including a full description of all products and services the client purchased along with other costs that apply.
Here again it is beneficial to use systems like Invoiceberry where software allow you to properly describe and include all costs that you want, fixed or variable, to your invoice in a professional and more presentable manner. It’s definitely worth looking into.
4. Not clarifying the payment terms and conditions
This is an area I can’t stress enough. No matter what kind of business you have, your terms and conditions are unique and apply to only your business. Never assume that the customer already should or would know what probably looks like the “obvious” to you. No, as a business, it’s your job to even state the “obvious” on your invoices.
You want to make sure that at all costs you are completely avoiding this recipe for disaster. You need to clearly highlight, when the payment is to be made, the deadlines, late payment charges and fines, and everything else that applies to your payment terms and conditions. Never hold back on this area of invoicing. This is what will create a solid ground for your business and help ensure you have a steady stream of cash inflow.
5. Mixing up your clients invoices
Again this might come across to you as stating the obvious. However, it’s that “oops” moment that we always make. I’m sure you know how busy, stressful and hectic it can be running a business. Especially if you yourself are doing you’re invoicing. Regarding, human error is unavoidable.
Just image how unprofessional it will make you look when your client receives an invoice from you that was not intended for them. This can seriously jeopardize your relationships with your clients and cause problems that should have clearly been avoided by being more careful.
So avoid this situation at all costs by investing a little more in a efficient and solid invoicing system.
These basic and simple tips can really help you to avoid disastrous invoicing mistakes.