Managing Your Invoicing System Effectively
Unlike retail outlets where invoices are issued as soon as payment for goods are received, some small, medium and large enterprises send invoices to clients a few days, weeks or months after the merchandise has been delivered. This is based on the payment terms previously agreed on by the seller and the buyer. Somehow, the lament of business owners, regardless of size, is that outstanding payments due are usually delayed, some of them caused by invoicing issues.
For these types of business owners, what they want is an effective and efficient process to request and accept payments, consistent invoice format, flexible reporting options – in short, an invoicing system that it effective and streamlined, and has a back-up system that will safeguard the data in case of outages, disasters and service interruptions. Currently, most business processes are computer-based, and invoicing software for billing clients online is one of the most effective methods to effectively manage accounts receivables.
Benefits of using an invoicing software
Invoicing software offers a variety of benefits to entrepreneurs. You can bill clients anywhere you are, automate your billing process, have a consistent format and directly email invoices to clients. You can request a read receipt, which lets you know that the invoice has been read. You can even send notice to clients when their accounts payables are almost due. At the same time, an invoicing software is integrated into your accounting process, so your financial report is automatically updated. Moreover, all your client data and accounting information is stored in one place, making accessibility to updated information very easy.
Steps for effective management of invoicing system
The first thing you have to do as an entrepreneur is to shop and compare invoicing software, to find the right productivity solution for you. There are various vendors of invoicing software that you’ll find through a simple online search. The invoicing software you ultimately choose will have an immediate effect on your accounts receivable process. But even if you have a good invoicing software, best business practices should never be forgotten. Combined with your accounting productivity tool, here are some tips, which can also help you make the right choice in which invoicing software to purchase.
- See to it that the invoice is easy to understand. The amount due and the due date should be prominent or clearly visible in the invoice.
- It is a good idea to use your invoice to advertise your products/services, so you can cross-sell. See if the software vendor has the option for something like this or if it is possible to customize the program, so you can add some advertising messages on the invoice.
- Do check with your clients if they can accept digital invoices. Remember that there are still customers who prefer to have invoices sent to them physically, while others like to receive them in both methods. This is something that you have to consider when looking for the right invoicing software. There should be a provision for the invoice to be printed.
- Whatever method you use to create invoices, make sure that you have all the information in the invoice for your clients to process the payment correctly. It includes the following:
- Your company’s contact information
- Specific due date when payment should be received
- Details of the service or product being billed
- The purchase order number
- Full amount due
- Penalties imposed for late payment
- The billing software should have options for flexible reporting and multiple users. It should be robust to allow access at different levels, with some staff allowed full access with editing capabilities, while others can be allowed to only view that data. In the same manner, reporting process should also be very flexible as different people in the organisation need different types of accounting reports.
- As the invoicing program generates your cash flow, it must never stop. See to it that your billing system has a back-up and data recovery plan.
Choose the right invoicing software from a reputable vendor by doing research, comparing programs and being specific with what you need.