Question – given the choice between a hard day of back-breaking labour on site or a few hours sitting down with a nice, hot cup of tea to sort out your invoices, which would you pick?
It’s the back-breaking labour, isn’t it?
Completing jobs for your clients is where you shine. Even the trickiest of tasks come easier to you than the massive pain in the proverbial that is the dreaded invoice. Alas, your business isn’t going to get very far unless you keep on top of billing customers and managing your cash flow. In fact, it’s not completely uncommon to hear of tradesmen who had to shut shop for good simply because they lacked a sufficiently efficient invoicing system.
But hey, we’re preaching to the converted here. You already know how important it is to manage your invoicing. You just wish it wasn’t such a pain.
Here’s the thing: it doesn’t have to be.
Below, you’ll find our quick and easy tips you to help you achieve simpler, smarter, and speedier invoicing.
Before you begin: prepare a proper quote
What’s the biggest nightmare you face when it comes to managing your invoices and payments? It’s chasing customers, isn’t it?
Let’s be honest, it’s usually the absolute worst task anyone who’s self-employed will tackle – but it doesn’t have to be. One of the main reasons we find ourselves picking up the phone or blasting out emails to late-paying clients is that those clients didn’t know (or at least, will say they didn’t know) your payment terms.
Knock this on the head by creating a written quote before you undertake any new job. Along with a cost estimate, include the payment methods you accept and your payment terms, and ensure that the client agrees to those terms in writing before you so much as break out a screwdriver. That way, clients have a full understanding of what’s expected of them and are far more likely to make payments on time.
Cut payment terms in half
Dealing with cash flow can start to get complicated when those 30-day payment terms you usually set mean that jobs which were completed in one month aren’t paid for until the following month.
Sure, you’ve always set a 30-day timeframe for customers to pay for you, and sure it’s a pretty standard way of doing things, but – nobody says you have to do it this way. You can set any timeframe you like. In fact, many experts on small business accounting recommend cutting the time from 30 days to around 13 or 14, making things much easier to manage.
Accept on-the-spot payments
There’s nothing to say you even have to wait 14 days if you’re customers are able to pay you immediately after the job is finished. You can simplify the whole process using a mobile payment system, enabling customers to make a card payment there and then.
Don’t have the technology to do that yet? Our recent guide to mobile card readers for small businesses looks at some of the best models on the market.
Send the same client two separate invoices, one written on a piece of paper and one sent via email. Which one gets paid first? It’s the digital invoice, isn’t it?
Whether you hand-write an invoice before leaving the client’s property or print one out and send it via good old Royal Mail, it’s easy for the client to shove it on top of a pile of other papers they still haven’t got round to dealing with.
Worse yet, it could easily wind up lost or misplaced.
Emailing that document instead not only saves you the time and hassle of walking the post box, but also means your client is far more likely to deal with it promptly.
Emailing your invoicing can be made even easier by using software to do it for you.
Project and invoice management software has come a long way in the last couple of years and is now far more affordable for the average small business owner or small business owner. Used correctly, the right software can prove to be a powerful tool for simplifying and streamlining the whole process of managing your projects, keeping track of costs, and creating invoices.
Taking this one step alone can transform the way you manage your invoices, making the whole process almost as effortless as a hard day on site.
What challenges do you face in managing your invoices? Have you found any tips, tools, or techniques to make the process easier? Share them with your fellow tradesmen via Facebook and Twitter, or let us know in the comments below.