by SCORE’s CEO, Kenneth R. Yancey
More companies are paying slower these days—which can mean big problems for small businesses that rely on timely payments to keep their cash flow healthy. Using a few simple tactics when creating and sending invoices can keep your business in the black.
Include the relevant information in your invoices. Frequently, payment is delayed because one piece of information is missing. In general, include your business name, the invoice date, the date payment is due, your business’s Tax ID number or Employer ID number, a P.O. number (if required by the client), a description of the product or services sold with itemized costs, and the total amount due. If any special discounts were discussed, include the terms.
Keep it simple. Invoices that look too “busy” are hard to read, which can cause errors. Use a plain, white background. Consider highlighting one or two key pieces of information – such as the total and due date—with bold or colored type.
Offer payment options. The more alternatives you provide for payment, the better your chances of getting paid quickly. Specify how you accept payments, such as by check, credit card or PayPal.
Invoice immediately. Send the invoice along with the shipped product or as soon as you deliver the service. It’s hard to believe, but some small businesses actually forget to invoice customers! Set up a system that triggers an invoice on the completion of the job.
Get personal. Before you start the work, know the specific person you will invoice, including their email, phone number and mailing address. Otherwise, your invoice might sit unpaid on the wrong person’s desk or in the wrong email inbox. (If you email invoices, use a “read receipt” that notifies you when the person reads the email.)
Try e-billing. Tired of hearing that “the check’s in the mail”? Your bank can set you up with e-billing options, which not only save paper and postage, but also save time.