How to streamline your invoicing processes
Here are some tips to streamline – and stay on top of – your invoicing processes so you can get paid.
Invest in accounting software
One of the easiest ways to streamline your invoicing processes is to upgrade from your old Excel spreadsheet to digital accounting software. There’s a range of programs to choose from – some are free, others incur a one-off upfront cost or charge per month. Among those commonly used by small businesses are Xero, MYOB, Reckon, QuickBooks and Sage. The free options include Wave and Free Accounting by CPA.
The software you choose will ultimately depend on your budget and the size and needs of your business. For example, Xero offers multi team access, which is perfect for a small PR agency which needs to invoice and pay various writers and stylists. A sole trader would benefit from MYOB Premier service that keeps track of personal account withdrawals as well as business withdrawals.
Most of the above programs bring together invoice, expense and reporting functions and – when linked to your bank account – can tell you when an invoice has been processed. Other handy functions include revenue insights and automated emails to clients that have outstanding invoices owing. Just think, no more awkward emails to clients having to ask when you will be paid!
Get the details right
Don’t overlook small but important details when invoicing. Include all the relevant information a client needs to process your invoice, such as your business name, contact details, ABN, whether you charge GST, your payment terms and bank account details, and any information around the nature of work completed and who signed off on it.
For example, a graphic designer invoicing a studio for logo creation would include their name (or business name), contact details, ABN, bank account details, “logo creation” as a description of the work and the name of the person who approved the logo. It helps to create a Google Docs template with all the relevant information that can be easily edited and sent.
Ensure that your invoice is sent to the right person. For instance, a copywriting agency may ask all invoices to be sent directly to the finance team. Create a reference number for each invoice, that way you can easily follow up on any that aren’t paid on time.
Establish a routine
Invoicing can be something you come to avoid if you don’t make time for it. Schedule it in as a regular business activity that needs to be done – and stick to it. Make a Google calendar reminder (weekly, fortnightly or monthly) that will provide a pop-up reminder and keep you on track. Create a checklist for yourself of what needs to be done each time, such as processing expenses, sending and paying invoices and chasing overdue payments. If you’re time poor, look into hiring a bookkeeper and/or accountant to help you keep on top of it.
Make invoicing a priority. Outline your payment terms at the beginning of any projects or work. Send an invoice as soon as a project is complete and follow up soon after if an invoice hasn’t been paid. You’re likely to get a quick response or swift turnaround in payment if you are querying a payment that is two weeks late versus one that is six months overdue.
Should you fall behind in managing your invoicing, remind yourself it will probably delay payments to you. If that doesn’t motivate you – not much else will!
Want to grow your business? Contact Prospa to learn how we can help with a small business loan.
A significant expansion of the instant asset write-off scheme has made it more useful than ever. Here’s what you need to know.View more
The announcement of JobKeeper 2.0 means some small businesses might no longer qualify for Federal Government support. Here's how to prepare.View more
Subscribe to the Prospa Blog
Be inspired! Sign up to Prospa’s newsletter to receive tips, tools and small business success stories straight to your inbox.