Invoicing accurately is an essential part of doing business. This is not something that will happen by itself, however, as there are too many things that can potentially go wrong and that will lead to mistakes. You must take the right steps to ensure you send accurate invoices.
Why is this important, though? The main reason is that inaccurate invoices delay payments as your customers will send you a query. You will then need to investigate and correct the invoice before re-sending it. This takes time.
It also uses your resources inefficiently. In addition, invoicing mistakes, particularly if they happen more than once, present a bad image of your company. It is, therefore, important you do everything you can to ensure the invoices coming out of your business are accurate. Here are six steps you can take to achieve this.
1. Track Sales or Hours Accurately
Many invoicing mistakes occur when product numbers, product prices, or hours are not properly tracked. Getting this right involves input from your team but you should also use software to make the process as easy as possible.
2. Use Accounting Software
Good accounting software will automate the invoicing process for you. Removing manual steps helps reduce the risk of error.
3. Ensure Your Order Process is Robust
Mistakes can occur on invoices before the sale from the customer ever makes it onto your accounting system. There are many examples including the account manager or sales person not properly communicating the discount agreed or the rate to be charged. Avoiding this involves having a robust ordering process as well as training those responsible for taking orders to ensure they understand the importance of accuracy.
4. Invoice Regularly
Even when you take every step possible to ensure your invoices are accurate, you will still get queries from customers. This could be due to a mistake on your side but often it is not. Either way, you will have to spend time looking into the query plus it will delay payments. This process takes longer the older the invoices are, not least because memories fade. It is, therefore, important to invoice regularly – as soon as possible, in fact. When you do this, queries can be answered quickly as everything is still fresh in everyone’s mind.
5. Discuss Cost Changes with Your Customers
In some situations, the amount you have to charge a customer will change, often due to circumstances outside your control. Third-party costs could increase, for example, or the customer might ask for something during the contract you regard as additional. In all these circumstances, it is important to think about client expectation. In reality, you should assume the client will expect an invoice for the amount you originally agreed. This means it is essential you discuss any changes in cost with your customer as soon as possible and before you send your invoice.
6. Ensure Everything is Itemised
This tip won’t directly improve the accuracy of your invoices, but it will make your invoices easier to understand. This will reduce confusion for everyone involved and will make mistakes easier to identify as well as reducing queries in the first place.
The above tips won’t take much time to implement but they will reduce the time you spend dealing with invoicing queries and will help you get paid faster.
For more help and advice with your business, please contact a member of the Gilroy Gannon team today.