Good Invoicing Principles & Processes For Better Cash Flow

Many small businesses and freelancers rely on invoices to get paid. Unfortunately, poor invoicing processes can let you down when it comes to cash flow. If you find yourself in this position, it’s time to learn effective invoice strategies to help boost your business health.

Are Your Invoicing Processes Jamming Up Your Cash Flow?

Mistakes on your invoices, delays sending them out and problems with late payments can all jam up your cash flow. What does that mean for your business? Poor cash flow means you have less money flowing in that you can use to pay for your expenses. Negative cash flow is when more money is going out of the business than coming in. Sadly, this is one of the biggest reasons why small businesses fail.

How to Invoice Effectively

Learning how to invoice effectively is an important step towards better cash flow. Here are some key practices when it comes to invoicing.

1. Improve Your Invoices
   If you’re ready to clean up your invoicing process, the first place to start is the invoice itself. Poorly made invoices can come across as unprofessional and make it harder for clients to pay you. Use a standard layout for all your invoices. Don’t overcrowd it with colour or design. Keep it simple and chic, and make sure you include all the important information invoices require
2. Automate Your Process
   There are many invoicing programs available that can streamline your process. Once you set them up, invoices can be generated quickly and effectively. If some of your clients are billed at regular intervals, automate the invoices to be sent at the right time. You can also schedule invoice reminders, generate receipts and keep track of unpaid invoices more easily when you have an automated system.
3. Get Your Timing Right
   Forgetting or delaying to send out invoices is a sure way to slow down your cash flow. Send invoices as soon as possible. If an invoice goes unpaid, you should follow it up in a timely manner. It may have slipped your client’s mind and your reminder can jog their memory. For more information, check out our guide on how to reduce your outstanding invoices.
4. Incentivise Early Payments
   If you find that clients are taking a long time to pay you, try creating incentives for early payments. For example, a small discount on their current invoice can prompt them to pay quickly. You should also clearly outline your late payment procedure. Indicate to clients that late payments will incur a late fee.
5. Make Payments Easy
   If your client has to jump through hoops to pay you, you might not get paid as fast as you would like. Make payment options easy and simple so that the process is streamlined on their end. Many automated invoicing programs will generate a link that you can email your client for easy online payments.

Get Help Improving Your Cash Flow

Effective invoicing is just one way to improve your cash flow. There are a whole range of other strategies for better cash flow and overall business health. If you need expert advice about doing so, Lawrence Group can help. Speak with us today to see how we can provide you with tailored and professional assistance.