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Small businesses depend on prompt payment of invoices to pay their business expenses and keep their cash flow steady. Prompt payments can also help improve the financial health of a small business as well as making the entire invoicing process run more smoothly.
However, for many small businesses, business admin is a task which can take up a lot of time, including processing and submitting invoices. Many businesses rush to submit invoices and make costly errors. It's not surprising that 54% of active trading companies are facing increasing problems with unpaid invoices, according to the Office of National Statistics.
Twyla Verhelst is the Head of FreshBooks' Accountant channel. She reveals her top five easy and simple invoicing tips that will help small businesses get paid faster.
It is important to have an online accounting system. The more organized you are, the fewer invoicing headaches will you face. In today's technology-driven era, choosing the right business accounting software is extremely important, and the first step in creating a reliable invoicing process.
Although there are clear benefits to managing invoices electronically, a small number of businesses still have not made the switch to online billing. For example, the Purchasing and Accounts Payable Survey 2021 revealed 24% of businesses still use paper invoices - not only does this take up a lot of time for the individual filling these out, but it can also delay payment.
Although this may seem obvious, you'd be surprised at how many small business owners make it difficult to get paid for their clients. To avoid high transaction fees, small business owners and freelancers may decline credit cards.
In addition, if clients are slow to pay because the payment process is more difficult for them, the lost time and expense of trying to chase down the money can quickly exceed the cost of accepting credit card payments.
Each client will choose their preferred payment method. For example, some clients prefer direct payments to a business account while others prefer PayPal or credit cards. Some clients may prefer traditional payment methods like sending a check. Important point: Before you send an invoice, make sure to discuss payment options. This will allow for quick and easy payments.
It is easy to rush through an invoice when you are busy and make a mistake. A checklist can be helpful in avoiding a situation where no payment is possible.
The best time-saver is to create recurring invoices. These invoices can be used to speed up payments and improve workflow.
This function can be enabled by simply creating an account at FreshBooks. You can specify the format of each invoice and the date when invoices are to be sent.
ACH or Automated Clearing House is a network that connects banks. This network makes it easy and quick to transfer money between banks, without the need of checking.
This is a great way to ensure clients settle invoices the way you want. You will also get paid as quickly as credit cards and only pay 1% per transaction
This is an easy and effective way to quickly get paid more quickly. It only takes five minutes to set it up.
Verhelst states, "Invoicing is a critical process for all small business. When payments are not made on-time it can lead o frustration that can impact cash flow and relationships with suppliers.
"Having a clear, streamlined invoicing process will transform the payment process, so you can then follow the same procedure every time. It's important to set up invoicing software. This will facilitate the payment process while reducing stress. It will also give suppliers a clear document to help them pay their invoices faster.