Once you’ve extended credit to your customers, invoicing them ona regular basis becomes your next, most important task when itcomes to getting paid for your products and services. But a full 80percent of all business’s collection and payment problems are dueto invoicing difficulties. Costly mistakes on invoices occur inseveral areas. The major errors are wrong addresses, wrong personbilled, payment terms not spelled out, and due dates not clearlyspecified.
The invoice you send out should always be typed orcomputer-printed. Illegible handwriting accounts for many of theerrors noted above. For clarity’s sake, invoices should be writtenin terms that everyone understands.
If you invoice a customer on an irregular basis, always have thepayment terms spelled out. If you do regular business with acustomer, keep a “statement of account” that you send out monthly.A statement of account is simply a recap of all the invoices sentto a customer during a given month. This statement should list eachinvoice by number, date shipped, and amount due.
Whether you use a computerized or a manual system, be sure tostay organized and know how your system works. In a manual system,many business people lump all the invoices together, then spendtime at the end of the month sorting them out. This system presentsseveral problems. If you are a one- or two-person operation,there’s a chance of losing an invoice or facing additionalend-of-the-month bookkeeping problems that delay your invoicing.Remember that if you don’t promptly bill your customers, they havethe luxury of using your money interest-free.
