Dealing with invoices might be among your least favorite tasks, but when you’re a small agency it’s obviously one of the most important. The best way to manage invoices is to use an invoice sample and create a strategy for generating, sending and keeping track of them. Good invoice management encourages regular cash flow, eases accounting woes and saves you time.
Let’s examine ways to get a handle on invoices so you can get back to work.
1. Choose the right type of invoice for the job
There’s no one-size-fits-all invoice template. Different payment plans work for different projects, so before you begin work talk to your client about a payment schedule that works best for both of you, and agree upon one plan. Here are some options to consider:
- Multi-installment invoices: Instead of paying you in one lump sum, your client can pay you according to a custom, milestone-based payment schedule, such as an initial deposit and remaining balance, initial deposit plus three equal payments over the life of the project, or any other schedule you determine. Whichever schedule you set up, it’s a good idea to also send a final invoice at the end of the project detailing the work that’s been completed and what’s been paid for.
- Recurring invoices: For ongoing projects for the same client, it makes sense to schedule recurring billing at regular, agreed-upon intervals, such as weekly or monthly. Getting on a schedule makes sending invoices part of your workflow, and with any luck your clients will follow suit and get in the habit of paying on time.
- Final invoices: At the conclusion of a project, send a final invoice to outline the work that has been completed and the retainer invoices that have been sent. Detail whether those retainer invoices have been paid, and list any final amount that’s outstanding. Even if the job has been paid in full, send a final invoice to wrap things up for both you and your client.
2. Manage invoices online
A quick way to reduce headaches and streamline your invoice management is to eliminate paper from the equation. Paper invoices have a way of piling up (for both you and your clients) and are a headache to manage. Plus, it’s easy to lose track of whether you’ve sent an invoice and whether it’s been paid.
With online programs like Square Invoices, you can send professional invoices via email, SMS or link from your computer or mobile device, and check the status of every invoice, including if your client has viewed, received a payment reminder or paid the invoice. You can also send invoices from your device using the invoice app and your customer won’t be charged a fee to pay.
Invoicing software with Square is free to use with no monthly fees. You just pay for processing when you accept debit and credit card payments and ACH bank transfer payments.
3. Avoid common delays
Even if you use online invoices, send your invoice right away and have an agreed-upon payment schedule, there are some other barriers to getting paid on time. Here are some issues that could slow payment:
- You sent the invoice to the wrong person: The project manager or primary contact might not be the person who deals with accounting, so before you deal with a lengthy back-and-forth (further delaying your payment), ask your client to whom you should send the invoice.
- You weren’t clear about terms: If you think the invoice should be paid within a month, and the client thinks that it doesn’t have to be paid until the completion of the project, you’re in trouble. To avoid an uncomfortable and frustrating situation, make sure your client agrees to your terms (in writing) before you begin work. You might also consider setting a shorter payment window or initiating automatic invoices to ensure timely payment. You can also use the “custom text” section of Square Invoices to clearly state your payment, cancellation and refund policies.
- You sent the invoice on an inconvenient day: Clients are least likely to pay an invoice they receive on a Sunday. But when you send an invoice on a Thursday, you have the highest likelihood of being paid within two days. Determine a payment schedule that results in the speediest payment from your clients.
4. Managing sent invoices in your invoice app
Sometimes mistakes happen, or you need to edit an invoice you’ve already sent. Luckily, Square’s invoicing software makes it easy to manage edits to past invoices. Editing, canceling and resending existing invoices can be done right from your mobile device with the invoice app.