Billing is an important aspect of every business. Depending on the industry, the standard billing cycle is 30, 60, or 90 days. In some cases, there are 45-day billing periods. To keep your company’s doors open, your clients must pay your bills.
The following are five easy steps to improve your billing process so that they’re paid on time.
1. Test Invoice Templates
Engineers possess precision and problem-solving skills. In 1960, engineer Kelly Johnson received credit for saying Keep It Simple, Stupid. The 1970s saw the application of the principle and additional variations.
If the engineering field reminds themselves to keep it simple, so should you.
To find an invoice template that’s easy to read, test a few with your clients. Narrow down the options to the ones that receive the best response.
The billing process begins with the invoice. It’s tempting to add a lot of information to the document, such as announcements, but getting paid on time is the priority.
Invoices that receive results improve your company’s billing process.
2. Make the Payment Due Date Easy to Read
When you find an easy-to-read invoice template, give the payment due date a prominent space. The date the payment must arrive ranks among the top five pieces of information every invoice should showcase. The others are the payment amount, invoice number, and your company’s information.
All companies experience cash flow concerns at some points of the year. It’s not that your clients don’t want to pay your invoice, it’s that they have several others to pay too and cash isn’t always available.
Other companies utilize software to help them keep track of their upcoming payments. When they enter this information into their accounting software, leave no room for doubt or question about the payment due date.
Invoices that place the payment due date in a prominent spot improve your company’s billing process.
3. Include Straightforward Call To Actions
To grow a business, it’s necessary to acquire new clients. You may offer them favorable terms the first few months to lure them in your company’s direction.
Whether your customer is new or old, every bill requires a straightforward call to action.
When your client receives your bill, they should know what to do next immediately. The call to action guides your clients. If you want them to pay the invoice in 30 days, make it clear.
Additionally, let them know the payment methods you accept.
Do you accept checks?
Are you willing to accept a credit card payment?
Do you offer payment through an online portal?
Keep the call to action short, friendly, and informational.
If your clients know what to do next, it improves your billing process.
4. Send Payment Reminders with Software
The majority of American companies have adopted accounting software that helps them produce invoices and send payment reminders. To maximize the software capabilities, use it to schedule payment reminders.
By automating the part of the payment collection process, you improve your company’s billing process.
You have customers that you don’t worry about when it comes to payments. They send it in on time, every time. Others that require a nudge. Don’t overdo it and keep them friendly. For example, once a week up to the payment due date suffices.
To add a human touch to the billing process, you can call your client too. It’s an opportunity to catch up, inform them of new products, and receive feedback on your current business relationship.
5. Go Digital
In 2021, the average startup founder is 31 years old. The average age of a successful startup founder is 45. Business owners have a median age of 50. Nonetheless, 91% of the population is broadband internet users.
One way to improve your company’s billing address is to adopt digital payment options.
You can integrate an online payment portal with your accounting software. It eliminates paper use and a couple of administrative steps. Plus you’ll attract the next generation of business owners that are coming around the corner.
Studies show that companies pay their bills late when they experience cash flow issues. If you improve your company’s billing process and don’t see results, it’s time to have a chat with those clients. Otherwise, consider an alternative. This article provides information on invoice factoring and other methods to get paid faster.