Quick payments is the key to the success of any business. Having said so, it’s not that simple to make your customers pay faster. The entire process of creating invoices, getting those processed, and finally getting all your customers to clear all payments on time is certainly a mammoth task for your business. Using invoice management software is the first step towards speeding up your invoicing process. Procrastinating or putting off such a crucial task will only damage your cash flow. So, how are you to deal with the problem? Here are five of the best ways to speed up your invoicing process and make it more efficient.
1. Get Your Accounts Staff Involved
If you notice that a lot of invoices are piling up and are not being processed, it’s high time that you look into the matter. Know who is actually responsible for the processing of all the bills and sending out the same. As a business owner, it’s impossible for you to compile and send all those invoices as you are too busy with the other important aspects of your business. Instead of delaying the process, why not authorize some of your more responsible staff members in the accounts department to do the job? Give them ownership and make them accountable for what they are doing. Your employees will feel more responsible towards their job, and if you use an invoice management application, you would still be able to approve all invoices before they’re sent out. That’s power to everyone.
2. Use Invoice Management Software
With an invoice processing system, you can save up to three hours for every invoice processed. And, if you are expanding your business, your clunky and time-consuming manual system will fail to keep up with your company’s growth. Invest in an automated system that will help you to make the most out of job management, quoting, advanced invoicing features and timesheets. There are some additional benefits of automating your invoicing process. You will get quick payments, and also improve in terms of cash flow – the key to the success of any business. Advanced invoicing through feature-rich invoice processing software will improve your company’s cash flow by at least 10 percent.
3. Send All Invoices on Time
Please don’t assume that your customers will clear all payments without you sending out the invoices. If you think so, the payments will be further delayed. Make sure that you instruct your accounts department to send out all bills right away. The faster you send the invoices out, the quicker will you receive the payments. All this is not as simple as it sounds. To speed up the process, develop a schedule to ensure that all jobs are done on time, and not neglected or forgotten. An automated process will help you monitor when the bills are created and sent out.
Once an invoice reaches your customers’ hands, they will be able to clear all payments quickly. Save the cumbersome task of collating and processing all the invoices manually. All records must be up-to-date and correct in your project and invoice management software so that they can be fast incorporated into the bill and sent out once the job is completed. If you are dealing with an organization that works with many vendors, chances are they have already shifted to an automated AP system. According to a study by a reputed accounting software firm, it was found that by using an invoice management and an online accounting system, a business can improve payment time by 31 percent. The time until payment was reduced to 33 days from 49 days.
4. Consider Recurring or In-progress Invoices
Recurring or in-progress invoices are used in many industries. You are required to make an upfront deposit in order to start work, or when the same job is done every month for a few selected clients. This type of invoices help you manage your cash flow better. When you have a proper invoicing system in place, you can make the overall process much simpler. These invoices will expedite the process by breaking down your invoicing stages into short, simple steps. Instead of having a huge invoice at the end of the task, it’s better to drip-feed the cash into your company’s account.
In-progress invoices prove beneficial if your customers are using the same package each month, and they help you break down a huge project into smaller installment payments. For best results, automate all of your processes with invoice management software to lessen admin time.
5. Chase up Outstanding Invoices
Despite using an efficient invoice management system, there will still be some unpaid invoices. Emails are overlooked or forgotten, customers get busy or papers get misplaced. This implies that you’ll need to chase up some of the unsettled bills. There is no point in delaying the process, and money always looks good when it’s in your wallet. When you have an invoice management system in place, chasing outstanding invoices is as simple as generating a report each month. Reporting on the metrics of due bills helps you to figure out the patterns. For instance, you may notice that it’s the same clients who’re failing to make payments repeatedly. Once you recognize the pattern, it’s easier to impose a late penalty for defaulting clients, or simply drop them if they are a pain in the neck.
Reminding clients about unpaid invoices has a considerable impact on your invoicing process. If your trusted clients get a gentle nudge about late payments, they will start paying faster to avoid penalties. Send reminders every month to improve your company’s cash flow.
Use the right invoice management software to accelerate your company’s invoicing process. Your business will benefit in terms of reduced admin time and improved cash flow, and there will be no delays in sending out invoices. With an automated system, you can cut out the tedious job of maintaining spreadsheets and filling out billing information manually. Inspire your clients to adopt AP automation. Explain to them the many benefits of embracing invoice management software so that they can make faster and hassle-free payments, get vendor discounts and avoid late penalties. At the end of the day, automation helps both ends of a business.