Your business depends on payments from outstanding invoices. Without prompt payment, your cash flow will suffer tremendously. Rather than just crossing your fingers and hoping for the best, here are 4 ways to build a better invoice to get your fund as fast as possible.
1. Use Direct Language
Most business owners fill their invoices with lengthy descriptions and complicated verbiage. More often than not, this confuses customers and clients. Making the terms of your invoice more clear or even simplified will help your customers better understand what is needed from them.
Some common phrases that are included in invoices that can be optimized are:
Change “Net” to “Days”
Change “Payment due upon receipt” to “Payment due on August 7, 2015”
These are two of the most commonly used phrases in invoices that can be easily misconstrued. By making the language less formal, you can help your customers understand the terms and get paid faster.
2. Implementing Late Fees
Nothing will make someone pay their balance faster than adding additional delinquent charges. By making it clear in the invoice that there will be late fees added, it will encourage customers to make payments faster, and on time.
If or when the specified date of payment has passed, you can increase your bill by adding on a simple flat rate or a percentage of the invoice. Many businesses have late fees attached to their invoices, but do not enforce them. By doing so, it will come off as more of a threat than a promise. Not only will this allow customers to delay payments, but this will change their attitude toward your business.
3. Sending Out Reminders
Reminders are great for many reasons. First and foremost, sending out reminders is a great way to get your customers to pay their invoices on time. They are also a great way for you to build a stronger relationship with your clients. A simple phone call, email, or letter in the mail will show your customers that you care about them. This will also place your business in the forefront of their minds.
Using reminders to politely ask for payments will help customers that have forgotten or were unaware of charges. You will save them from the late payments that will be added, and will show your customers that you have their best interests in mind.
4. Use Invoice Factoring
If your business is still struggling with late payments, or needs to catch up on finances try using invoice factoring. With invoice factoring, a factoring company will step in and purchase your outstanding invoices. They will grant you up to a 96% cash advance in just 24 hours or less. This will help you build a strong source of capital to keep up with outstanding charges. Invoice Factoring is a less expensive and less time consuming financing option that many businesses use to eliminate cash flow problems.
We hope that you consider these four tips to create a better invoices for your business.These four simple tips can help your business get its hard earned cash faster.