Invoicing is always a tricky part of running any business that takes time, but sometimes, it’s hard to remember what’s required with so many things running on top of each other. That’s where this list of invoicing tips comes in handy – designed to coach you through your invoices once and for all!
Weighting your invoice for approval
Your invoices must be balanced, accurate and include all the items or services you deliver. It’s worth noting that accounting software also needs to be used to ensure the calculations are correct, especially when it comes to percentage mark-ups. When adding their value to the total invoice price, organisations are often charged for receiving bad advice or help. When it comes to invoicing and pricing, you can make your business cashflows more robust is to weight your invoice instead of securing the whole price up-front. The idea is that this WILL help secure funds as much as possible. You will also be moving away from those tipping points where prices go down as people buy the services further upstream in the project/service value chain.
The big number that says everything
As an entrepreneur and small business owner, you need to find ways to maximise the small cashflows you do make. Learning to improve your business cashflows can mean less stress and more time for you and your family. The big number is a great new business cashflow tool that can help a company run efficiently and improve this efficiency day by day. Many people are very willing to pay for subscriptions, e-books, memberships, and services today. While you should be prepared to invest in your business website to receive payment, it should surely be an initial step before expending other investments. The key here is evaluating how much traffic cost per conversion which should drive your decision to accept or decline it.
Weighting by future payables
If you’re selling, building, managing a project using invoices as a contracts management tool, your best friend recently should be a revenue weighting. Revenue weighting is a metric assigned to every invoice in the system to adjust for risk and ease of collection to divert cash to other areas. We start this insight by looking at whether invoicing tasks will take up more time than not performing those same activities. Many business owners make many mistakes when planning their bills. This includes forgetting to include future invoices, paying current bills with future funds, and not always using the money at hand to make ends meet for the month. Entrepreneurs should track how often they use which type of fund (cash or receivables) to further optimise their cash flows.
Being transparent with customers
Transparency with customers is very important in business. For example, as an invoicing specialist, the accounting practice I’m working within has been mandated by company policy to maintain 50% open rates from our customers at all times. This took me off guard the first few times I issued a bill that had not been “paid.”My bulk strategy has evolved into sending a draft invoice with an accompanying email to a customer who speaks up if something is unclear. It is vital to ensure customers are transparent with their accountants. Just like you, they expect to know the true financial state of your business, which can be better expressed by scanning in invoices or having instant access to purchase orders and work accomplished for the month. No matter what invoicing tool you’re using, ensure it states clearly how long invoiced transactions were taken.
Keeping to PAYG principles
Invoicing is a “conflict-based” organisation, meaning different parties will ask for different things from the accountant. But what is the PAYG principle? The PAYG principle is a business practice that is a sound commercial approach to how an organisation manages its financial affairs across various revenue streams, which includes the entire process of receiving, planning and distributing cash. If you’re making any money with your business – whether that’s through personal service or freelance work – it will ALWAYS be better for you if you can keep direct debit payments to an absolute minimum. Not only does this mean the client pays less, but now they keep their account in good standing, meaning they can settle bills easily and quickly once the trial period is over.
Tracking your performance
With a tool like Webropol, you can use feedback from your leads to measure the quality of leads you are generating for your company. One key performance indicator is the value of leads generated per lead cost. Other important metrics include the time to find leads through Webropol’s campaign engine feature and the number of leads returned for conversion activity. Webropol will allow you to prospect, reach out to leads and target customers, create win skills reports, measure company performance and evaluate training incentives.
Invoice Finance Calculator:
Maintaining your businesses cashflow can be challenging. You may consider invoice finance as a method to maintain your balance. Invoice finance is a type of finance that unlocks the cash tied up in your invoices.
Use this free and easy invoice finance calculator to find out exactly how much cash your business could be eligible for with invoice finance. Here is also a general business loan calculator that SME’s can use.
Ensuring good cash flows for your business is complicated. By implementing the above tips and following them carefully, you’ll see positive changes in invoicing practices that will ultimately help your business grow faster.