Invoicing Etiquette for Small Business Owners If ever there was a time for being firm but polite, and patient but insistent, it is when you are owed money for work done.
By John Rampton Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
There are times when getting an invoice paid is more challenging than the work you just completed. After all, it's not exactly an easy task to track down late payments. It pretty much feels like a game of cat-and-mouse. But, what if there was a way for you to receive payments on-time more frequently?
This can be accomplished if you stick to invoicing etiquette. With invoicing etiquette, you can create and maintain professional communications with clients. This builds trust and leads to repeat business and referrals. To get started, follow these easy tips.
Use the best software for your business.
First things first, make sure that you're using good invoicing software. This software will handle and manage all of your invoices so that you can focus on growing your business. However, recipients will appreciate the consistency of you using the same software when issuing bills.
The reason? It lets them know what to expect from you and they're comfortable using the software -- they also trust that it's secure.
Also make sure that the software lets you customize the invoices so that they stand out, such as being able to add your logo or change the colors and font. Customizing your invoices can also help clients remember why they hired you in the first place. For example, it wouldn't make sense for graphic designer to use a generic and uninspired invoice template since that doesn't show off their talents.
Related: 10 Online Invoicing Services for Small-Business Owners
Set your terms up front and list your services.
An invoice should never contain any surprises for your clients. In other words, when a bill arrives, the client should at least expect a ballpark figure, as well how and when the invoice should be paid. This is should have all been discussed during the negotiation process.
Most important, make sure that you list all the services that you provided. If you sold products, then you would list all the goods that were sold. This way the recipient can clearly see what they've been charged for.
When an invoice contains surprises, such as hidden costs, the client is going to be more reluctant to pay it on-time. Even worse, that trust you had previously built is now shattered.
Related: 5 Ways Smarter Invoicing Can 10x Your Business Cash Flow in Weeks
Create and stick to your policies.
Creating invoice policies and sticking to them is a part of the game. For example, if your last invoice said "due in 30" but the latest invoice states "due on receipt," then clients may feel rushed and confused.
Don't surprise your clients with things like fluctuating due dates or having no tax on one invoice but tax on another. If for some reason you must make a change, then inform them before sending the invoice. This is a common curiosity that shows you're both a professional and considerate individual.
Provide contact information.
Whether you're sending an invoice to a first time customer or to someone who've worked with for ten years, always include contact information. It's a simple way to alleviate any questions or concerns in the event that there's a problem with the bill.
At the very least, your invoices should always include your business name, address, phone number, and email address. This way your customers know exactly how to get in touch with you if they need to.
Make paying convenient.
Want to ensure that you always get paid on-time? Then make it as easy as possible for people to pay you. Accept a variety of business payments include pay links in your invoices, and make sure that they have all of relevant information. For example, if they're paying you with an eCheck, then they'll need your bank information.
With that in mind, you also shouldn't assume that your clients will be using your preferred payment type. You may be cool using a gateway like PayPal, but they may prefer ACH. Ask them how they want to pay you and be a little flexible with them.
Related: 15 Surprising Benefits of Mobile Invoicing
Say "please" and "thank you."
It's been found that invoices containing a simple "please pay your invoice within" or "thank you for your business" can increase the percentage of invoices that are paid by more than five percent!
It's believed that being polite helps establish and strengthen relationships. And, when you have a solid relationship with a client, they'll be more inclined to pay you quickly.
Ask for half payment up front for large projects.
Do you have a client that wants you to work on a large and time-consuming project? Don't hesitate in asking for a payment upfront. In fact, it's normal to request at least half upfront.
Asking for a down payment protects you from the consequences of tardy payments and covers expenses as you're working. For the other party, it ensures them that you're going to complete the project in a timely manner.
Related: 15 Advantages of Using an Online Invoicing Software
Politely follow-up
When a client doesn't pay your invoice it's your responsibility to follow-up with them immediately. While most invoicing software will send automatic payment reminders, there will be times when you'll have to contact the client personally.
Instead threatening them or screaming at the top of your lungs, keep your composure. Remember, it's not professional for you to act that way. And, again, being polite is a guaranteed way to maintain strong relationships.
Deliver digitally, in-person and by mail.
If you were polite but still no payment deliver the invoice again digitally and then drop it-off in person. Sometimes redundancy is an effective way to triggering a payment from those sluggish clients. What if they're in your proximity? Print the invoice out and mail it to them. It may cost you the postage, but the clients who aren't as tech savvy will appreciate it.
