Client billing and fulfilling invoices can often turn into a nightmare for small businesses and large enterprises alike. The billing process can be cumbersome for firms with a limited workforce that prefers to pay more attention to company growth than putting the invoices out. Even if the invoices are sent out promptly, it’s not certain that the client will pay on time.
Importance of Billing
A company’s billing process and customer interface is as important as its service or product. Prompt billing is crucial to realize optimum cash flow, especially if the company is working on different projects simultaneously.
For accurate invoicing, you require precise data about varying factors. For instance, different rates may apply to different individuals, or the time of the same person could be billed differently. Prior to invoicing, calculate the rates and hours.
If done manually, the process could be tedious and slow. And any re-entry of data may lead to errors. Such issues accelerate with more workers. And if the billing is incorrect, payments may get delayed and client loyalty and confidence eroded.
Your goal is to ensure the client is happy with the payment terms and at ease with the payment methodology. The easier and sooner the bill, the quicker you’ll have revenue added to your working capital. Simply put, your firm’s profitability hinges on this “cash flow” function. Therefore, streamlining the billing process is vital.
The following are a few tips to improve your billing structure:
Though this sounds like simple advice, make invoicing for the job your highest priority as soon as the project work is completed. In a business, workload keeps increasing and things could escape through the holes. Billing is not the reason why you started the business, so it’s likely it could be among the first casualties.
Proper & Timely Billing
Clients usually get miffed if the billing is not done on time and the details not presented the right way. Bill only those hours the client finds productive or offering some value.
For instance, do not bill your employee meeting hours or don’t start the billing clock as soon as the employee swipes in his card. Ideally, the bill shouldn’t include items such as team meeting, office conference, review of file, attempted to call, etc. that do not directly add to the file’s progress.
Do not bill until the client has seen the work product. Send the work summary to the client before he needs to make the payment. This demonstrates value and also indicates monetary gain is not your only motive. Bill on time and adhere to the structure. Timely billing helps the clients view their position and which increases your chances of receiving payment.
If a client pays on or well within time and resorts to your preferred payment method, let him know you’re happy. A good tip that many professional billing companies recommend is to offer prepayment discounts and coupons if the client is paying well in advance consistently. Such positive reinforcements won’t just ensure prompt payments going forward, but also a repeat customer.
Keep Some Leverage
Don’t deliver completely if your industry or service is based on multiple payments. If you deliver the entire product without receiving payment in full, getting either the product back or payment on time can be difficult. If your business is part of an industry where payment post work completion is normal, work with clients with good credit history.
Schedule Deadline Reminders
You need not keep pestering clients about billing and outstanding invoices. Reminders a day or week before deadline is reasonable and also often appreciated. Find out what shapes out perfect for your clients and business. Reminders are especially important if your company charges late payment fees.