Merely 25% of all the invoices get paid on time. From the rest of the unpaid invoices, most of them are paid without any late fees. Yet, some businesses receive their share of the money without much hassle. Do you want to how these companies do it? Well, the answer is simple – Invoice Payment Terms.
We bring you the best tips in this informative guide on how to pick the best invoice payment terms to get paid faster. After careful analysis, the below-listed professional invoices for payment terms and best practices will help your business to maintain cashflow seamlessly.
Especially for small business owners, entrepreneurs or even for startups getting paid and having a healthy flow of business funds is the defining factor for the success. However, it is not always as easy as sending an invoice.
Following are the best practical tips for invoice payment terms:
1) Prerequisite Terms Contract
It is the first and best step to put to practice. Discussing payment terms in advance before you begin with the work sets everything in the right place from the start. Prerequisite terms contract or draft clears the mutual expectation between two parties. It leaves no confusion about payment, currency, service delivery, etc.
2) Keep Account Of Inventory & Time
Make sure to be on top of product and stock records and numbers as this will save you time and most likely will save you from missing something in the invoice. Make sure to include all the billable hours and calculate final cost accordingly, if it is over budget then you can inform clients before rather than surprising them at the end.
3) Clear & Easy To Understand Invoice
List all the details of the job with description and quantity. Try to avoid invoice slang as clients might get confused which will only further delay the payment. It is recommended to personalize your invoice with the business logo so that your clients start getting associated with your brand.
4) Address The Right Payer
In a large organization, the person who ordered the work may be different from the one who might be looking after the payments. So ensure to address the sent invoices to the authorized person. It is advisable to call and find out the person who is in charge of paying for invoices in order to get paid accurately and on time.
5) Send Invoice Soon, But Not Too Soon
Usually, the best time to send invoices is just after you have finished the job as you can account for each detail of the work and there are fewer chances of missing out on some specific details pertaining to the job. Online invoicing and billing app will let you create custom and professional looking invoice recurringly to streamline the invoicing process.
Want to know more about when to send invoices to the client? You can read about it in more detail by clicking here.
6) Maintain Contact With Your Debtor
When certain payments are overdue, try to maintain contact with your client by sending regular reminders, monthly statements, etc. even though the payment is unnoticed by your client, try not to be rude as it might ruin business relation.
7) Late Payment Charge
If your payment terms are clearly outlined in your invoices then you can fairly charge interest to them in terms of late or overdue fees. Be prepared for non-satisfactory feedback from the client if you’re going down this road. Try to pursue with a discount or late fee waiver in good faith for once or twice but make sure not to make it as a habit.
To run your business effectively and maintain cash flow efficiently, you’ll always be in need of proper tools such as free invoice generator. Cloud-based invoicing solution provider Moon Invoice helps you with your daily business tasks and it also simplifies the process.
Moon Invoice offers you multiple payment options along with multi-currency support. With Moon Invoice you can work from anywhere by downloading apps available for all platforms, i.e, iOS, Mac OS X, Android, and Windows. In addition to this, Moon Invoice app also helps your business with Import/Export & Print and Mobile & Sync.