Invoicing is a very important aspect for any business.
From freelancers to giant companies, everyone uses invoices to get paid on time (or not on time). Money is the main feature for every business and billing is the source for getting paid.
Most people try to avoid mistakes while invoicing but there are some common errors that people make even after taking the utmost care. A small mistake in an invoice can lead to a big hassle.
A simple typo can lead to an illegal activity, so it is important to make sure that every invoice that goes out of your hand is perfect and is free from any kind of errors.
Yes, it is undeniable fact that invoicing is not easy, and it won’t even excite you at all but it is important to craft the bill with utmost perfection.
Here are the seven common mistakes people do while billing.
Most of the small to medium sized business owners, or even freelancers choose a day at the start of the month like Monday early morning or Friday evening for invoicing. This creates confusion for clients and customers.
They won't have any idea of when to expect the invoice from you, and this even shows an impact on the payment too.
So it is important to set a particular date at the start of the month and bill on that day for sure or after every purchase.
This way the client will know that you will be sending an invoice on that particular day and will be ready to process the payment at that time.
Don’t Postpone Invoicing
If you have offered a service or sold an item to one of your clients, then it is better to invoice immediately. If you postpone the work, there are chances that you may even forget about invoicing.
So it is better to bill the client immediately.
Remember invoicing is not the end of the process, there is another big thing that you have to take care of, and that is getting the bill paid.
Sooner the customer receives the bill, higher chances they will be able to pay it on time, meaning you can spend less resources reminding them.
Providing the Terms of Payment Clearly
This is another important aspect that one must not forget when they are invoicing.
If you are new to the billing, then there are high chances that you will forget mentioning the payment terms and conditions of invoicing to the clients.
You have to make a clear statement to the customer by mentioning your terms and conditions about the payment, the steps that you will take if the payment is delayed, etc.
This is the most important factor that most of the people miss. These details will also make client pay on time without any postponement.
In large organizations, there are different departments that carry out different tasks.
So it is important for you to know about the department to which you have to address the invoice to. Sending the invoice to the wrong department can lead to a greater chaos.
If you have a large amount of clients and are juggling through invoices there is a chance to even send the wrong invoices to the clients.
This will not only leave you embarrassed but you can even face legal disputes because of leaking the client's information.
Not Including Your Logo
The logo is the identity of your business and you display it clearly on the bill.
Do not compromise on the look of the invoice at all. It must be crafted with utmost perfection and make sure that you add your logo on each and every invoice that you send out.
If you are using billing software then add your logo by default.
Not Having Backups
Make sure to have all your invoices on a cloud backup so that you can access them whenever necessary. This is one of the most important things.
If anything happens to your hard disk, you can follow up with the clients with the help of cloud storage.
Detailed Invoice with No Hidden Charges
Make sure that you bill your client with all the details clearly mentioned.
From the date you are invoicing to the final amount and the bank account details, everything must be in place so that your client will pay you on time without any issues.
Eliminate the hidden charges. If you are charging your client for anything, make sure to mention about it in advance.
This will give them a clear idea about the payment and hence they won’t suffer because of the extra charges.
These are the common mistakes that almost everyone commits at one point or other when they are billing.
Billing may sound boring or monotonous but as it is the important part of your business, do not ignore it under any circumstance.
What are the most common invoice mistakes?
- Inconsistency when issued
- Postponed Invoicing
- Bot Providing the Terms of Payment Clearly
- Not Including Your Logo
- Not Having Backups
- Detailed Invoice with No Hidden Charges
Author Bio: Hitendra Rathore is a Software Analyst at Hyper Drive Solutions. He has spent the majority of his career in the software industry gaining experiences in areas such as retail POS billing software analysis. Outside of the office Hitendra enjoys spending time with his family and listening to music.