Are you guilty of these invoicing errors? While invoicing customers might seem like a straightforward task, there are a lot of mistakes you can make which can negatively affect your reputation and cause unnecessary hassle. Below are some of the common blunders that companies make when sending invoices.
Forgetting to send an invoice
After completing work for a client, it’s essential that you send an invoice promptly. If you forget to send an invoice, you are depriving yourself of money that you have worked hard for. While there is no limit as to how long you can delay sending an invoice, it is best to send it within 30 days unless there are ongoing disputes that still need solving.
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Leaving out the due date
It’s vital that you include a due date on your invoice. Without stating the deadline in writing, a customer may legally be able to keep delaying a payment. Encourage customers to pay promptly by clearly stating the due date. You can even include some small print stating the penalties that will occur if the deadline is missed.
Not itemising costs
Most customers like to be able to see exactly what they are paying for. Breaking down costs can help to make it clear as to why you have been charged a certain amount. Itemised invoices can also help customers with expense tracking. All in all, they may help to prevent billing disputes.
Throwing in hidden fees
If you quoted for a certain price initially, it’s essential that this quote included all fees. Throwing in surprise hidden extra fees could anger customers who have budgeted for a certain price. Be transparent about all fees upfront so that customers don’t feel like they’re being conned.
Getting your calculations wrong
When calculating how much clients owe, make sure to double-check your figures. Billing errors could result in you overcharging customers, which could lead to complaints. Alternatively, you could undercharge customers and lose money. Check for typos, accidental duplicate charges or missing items before you send your invoice.
Failing to chase up invoices
Unfortunately, not every customer will pay their invoice by the due date. You must chase up late invoices so that customers don’t feel that they can get away with not paying you. On top of sending payment reminders after the due date, consider also sending reminders a couple of days before the due date – some customers may have genuinely forgotten to pay, and this reminder can prompt them to make a payment before the deadline.
Not using invoicing software
Invoicing software can help to automate much of the invoicing process – including calculating costs, generating invoice documents and sending payment reminders. Some accounting software applications have built-in invoice features. Alternatively, you can download separate specialist software for the sole purpose of invoicing. Take the time to compare different software solutions.
Conclusion
Avoiding invoicing errors involves double-checking information, being transparent, and using software to improve accuracy. Next time you send an invoice, consider the above mistakes.