6 common invoicing mistakes to avoid
Poor invoicing practices could undermine your business cash flow. Here we tell you how to avoid some of the most common invoicing mistakes.
In Australia, small businesses wait, on average, a little over 26 days before their invoices are finally paid1. With cash flow issues being the leading cause for business failure1, it's vital you get your invoices right first time. Here are six common invoicing mistakes businesses make, and how you can avoid them.
For many customers, convenience is king when it comes to making purchases. This is one of the reasons instant payment methods such as PayPal, Google Wallet and Apple Pay are becoming so popular.
So, if you're still limiting your customers to cash payments or cheques, it might be time to give your payment options an upgrade to an online solution. This way, your customers can pay your invoices anywhere, anytime, which can help minimise late payments.
When writing invoices, the devil is in the detail. Addressing them to the wrong person, forgetting to include a due date or providing the wrong item descriptions, for example, are all simple mistakes that can hold up your payments.
With a little due diligence, these kinds of errors can easily be prevented. As well as taking the time to double-check your invoices before you send them out, digital invoicing templates such as those provided by Westpac's Biz Invoice invoicing tool can help you minimise mistakes.
Biz Invoice is complimentary with eligible Westpac transaction accounts and is accessed through online banking2.
Preparing invoices for your clients 'when you get a chance' can quickly lead to accidental slip-ups. Instead, you should aim to send invoices out as soon as the job is complete or the order is delivered.
With Biz Invoice you can generate and send each invoice straight away from your mobile or laptop. It also stores customer details and line items, so you don’t have to retype them each time you write an invoice – saving you time and helping avoiding typing errors.
If you're still using the same invoicing template you used when you first started out, you might want to check your terms and conditions. Start by reviewing your fine print first to determine whether your payment terms still apply today.
While you're at it, you might also want to give your old template a design overhaul, consider Biz Invoice, or link your transaction accounts to invoicing software to help you streamline your accounting processes.
Despite your best efforts, invoices can go astray and customers can forget, or neglect, to pay them. Here, a simple follow-up can sometimes do the trick. This is where online accounting and invoicing software comes in handy, as many platforms contain an automatic follow-up feature (such as payment reminders in Biz Invoice).
Invoicing is not only about the influx of funds, it's also about building stronger business relationships and developing a solid customer base. A simple 'thank you' for choosing your services after receiving a payment can go a long way. This can help you increase the chances of attracting repeat business, so the invoices keep flying out – and cash flows back in.
The process of invoicing may be something you've given little thought to in the past, but falling into bad habits could be costly. By taking the time to eliminate common mistakes, you can actively help keep your cash flow on track.
2. To be eligible for Biz Invoice you must hold a Business One Low or High Plan transaction account or a foreign currency account (other than Chinese Yuan RMB) and be registered for Westpac Live Online Banking. Terms, conditions and fees apply. Before making a decision, read the disclosure documents for your selected product or service, including the Product Disclosure Statement , by clicking the above links and consider if the product is right for you.
The information in this article is general in nature and does not take your objectives, financial situation or needs into account. Consider its appropriateness to these factors; and we recommend you seek independent professional advice about your specific circumstances before making any decisions.