In the manufacturing industry, you are constantly faced with outstanding invoices. Late invoices can put your business’s operations on hold. Poor invoice management not only hinders your cash flow, but also your reputation with customers.
6 Tips to Better Manage Your Invoices
Rather than letting your invoices get the best of you, here are a few ways that you can get paid on time and in full with every invoice you issue.
1. Be Timely & Consistent
The most crucial piece of advice that you can get is to always be timely with your invoices. It is important spend time managing your invoices process so that every invoice is issued in a timely manner.
Whether this means hiring an administrative team or an invoice factoring company to manage your invoices, it will be a worthwhile investment.
Keeping a template of your invoice on hand throughout your entire place of work will help speed up the process. Having to create a full invoice with each and every client that you serve is a time consuming step that should be avoided.
2. Make Sure Your Clients Understand Payment Terms
Being consistent with the term, dates, and due balance will allow equip your customers with the a clear sense of what is needed. Be sure that your invoice is printed in plain language that can easily be understood by your clients.
Don’t make your clients search through loads of text to find what they need to make their payment. Rather than using wordy language, layout your invoice to showcase the important details. Make the payment due date, payment amount, and your company’s address apparent on the invoice to ensure your client knows exactly what is expected of them.
If your business has unique payment specifications, be sure those are spelled out too. This can be anything from late payment fees to preferred payment methods. The goal is to make it easy for your client to pay their invoices.
3. Reward Good Behavior
Have a client that constantly pays on time? Reward them with incentives on their next order with your manufacturing business. This will help you build relationships and make it easier for you to communicate with clients about their payment.
Incentives not only reward current paying customers, but also encourage late-payers to drop their bad habits. By making your clients feel as if they are special, they’ll be more likely to pay their invoices on time and choose your business again.
4. Meet Your Own Deadlines
One of the easiest ways to turn off clients is to be inconsistent with your own deadlines. If you wait two weeks to send out your client’s invoice, don’t be surprised when their payment is two weeks late.
Getting your invoices out on time will ensure that you get paid faster. Your clients will have the information they need to make the payment before they forget about your services completely.
5. Have Open Communication
When you are dealing with invoices, open communication is key. If your client is late on a payment, there’s no harm in picking up the phone. Let your clients know that you are involved in every process from start to finish by keeping communication open at all times.
6. Use Manufacturing Invoice Factoring
Do you have massive amounts of outstanding invoices wreaking havoc on your cash flow? Don’t have enough time to properly manage your invoices? Consider utilizing manufacturing factoring.
With manufacturing factoring, your business will work with an invoice factoring company to get an up to 96% cash advance with low rates on your outstanding invoices. The invoice factoring company will take your invoices and turn them in into cash in just 24 hours or less, based on the value of the invoices. When the payment term is due, your customers will pay the invoice factoring company the value of the outstanding invoice to it, rather than to your business.
Benefits of Manufacturing Invoice Factoring
This not only allows you to get paid instantly for your work, but also takes the burden of managing your invoices off of your shoulders. With manufacturing factoring, your business can build a strong source of working capital without adding any additional work to your team.