Invoicing is an essential part of any business—irrespective of its size and nature, though the size and nature of a business definitely influence the type of invoicing process that is required by it.

The process of invoicing gets significantly challenging in a contracting business. This is because they offer services on a ‘per-job’ basis and also work for themselves. This brings in a lot of challenges and discrepancies in the process of making an invoice.

…but the good news is, we have an answer to that too—Billing and invoicing software for contractors!!

Here are some of the top problems faced by contractors in the invoicing process and how having a contractor invoice app can be helpful.

9 Challenges Faced by Contractors in the Invoicing Process

1. Inconsistency in Formatting

Inconsistency in formatting is one of the most common mistakes that are made by contractors during invoicing. Some of the reasons are:

  • Jobs of Different nature
  • Different employees use different methods to map invoices

Whatever might be the reason, inconsistent formatting of invoices will have several ill effects. These are confusing for the customers to understand and can create complications in financial analyses that are made during different quarters of the year.

2. Absence of Consistent Categorization of Products and Services

Another mistake that is often viewed in the invoicing process of contractors is that they fail to categorize the products and services consistently in the same category time after time.

To keep accounting uncomplicated and straight, it is important that the products and services are categorized consistently in the same manner in every invoice. The invoice should also be designed in such a way that they give maximum information to the customers about the products and the services.

3. Inconsistency in Pricing Parameters

Inconsistency in pricing parameters is genuinely a problem unique to invoices made by contractors. Unlike product-based businesses that have straightforward pricing, contractors deal in services where pricing can fluctuate depending on the nature of the service and the time consumed in it.

This makes it important for the contractors to have consistent pricing parameters so they can have invoices that can keep the customers happy, consistently!


4. Sending Late Invoices

A lot of contractors are so busy with other activities of the business that they completely forget to send an invoice to the customer at times. This results in a late payment from the customers.

Having billing and invoicing software takes care of this problem. The invoices are generated automatically and also sent to the customers directly, on time.

5. Failure to Follow Up on Invoices that are Unpaid

Just like there is a failure to send invoices on time, similarly, there is a failure to follow up on invoices that are unpaid by the customers. This is possible with too much work around or using software that does not have the feature of tracking an unpaid invoice.

The use of online invoicing software for contractors is the answer here. Such software is designed to send notifications and reminders to the customers for timely payment of the invoice.

6. Undertrained Employees

Just like the multiple other ways, undertrained employees can be detrimental to a fine invoicing process too. For the employees to generate perfect invoices, they need to be well-trained about the right formatting of invoices, different categories of products and services, understand the nature of business and the meaning of billable hours, etc.

It is therefore important to invest both time and money to train your employees about the process. Also, provide feedback on their performance from time to time.

7. Not Having a Formal Document for the Invoicing Process

A contracting business that does not have a formal document for the invoicing process will have employees that are confused about invoicing and do not have answers on how to invoice the different products and services.

To avoid any confusion about invoicing, it is suggested that a contracting business should have a formally laid down invoicing process. It will explain all the different invoicing standards to be followed, how they need to be followed, and who is to be held responsible if that does not happen. It might be a time-taking and money-taking process but it will bring about a smooth invoicing process.

8. Generate Unprofessional-looking Invoices

A lot of contracting business makes the mistake of generating the most unprofessional-looking invoices without realizing how they hamper their brand image.

This is where having online invoicing software for contractors gives an edge. The invoices generated with this software are prepared digitally, formatted professionally, and have the brand’s logo, all of which make it very impressive. It is also much more convenient and fasts to prepare invoices with them than doing it manually.

9. Ignoring the Terms and Conditions of Invoice Payment

The contractors often ignore the terms and conditions of invoice payment and choose the ‘one-size-fits-all’ kind of approach. The absence of flexibility in terms and conditions of payment during different situations often causes disadvantages to the contractors.


The Final Say

Having a contractor invoice app and generating customized invoices according to the terms and conditions will bring long-term advantages to the contractors in their business.

Looking at all the complexities and challenges associated with an invoicing process, the first thing you must consider as a contractor is to have genuine billing and invoicing software that will take care of all the struggles associated with the process. You will notice how using such software will make the process quick, and automatic and will let you send customized invoices to your customers at a click of a button!