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Many small businesses rely on prompt bill payments to cover business expenses and maintain steady cash flow. Prompt payments can also help improve the financial health of a small business and make the entire billing process smoother.
However, for many small businesses administration is a time-consuming task, including processing and submitting invoices. This leaves a lot of people scrambling to fill out invoices leading to costly mistakes. That considered, it may not be surprising that the latest Office of National Statistics survey found that 54% of active business enterprises are now facing growing problems with unpaid invoices.
Twyla Verhelst, Accounting Channel Manager for FreshBooks, reveals the top five simple and easy billing tips to help small businesses get paid faster.
Create an accurate online system
Having an online system in place to keep all of your accounting organized is essential, and the more organized you are, the less potential billing headaches you will have. In today’s technology-driven age, choosing the right business accounting software is extremely important and is the first step in creating a reliable invoicing process.
Despite the obvious benefits of digital invoice management, a significant minority of businesses still haven’t made the leap to online invoicing. For example, the 2021 Purchasing and Accounts Payable Survey found that 24% of businesses still use paper invoices – not only does it take a long time for the person filling them out, but it can also delay payment.
Simplify the payment process
It might sound obvious, but you’d be surprised how many small business owners make it unnecessarily difficult to pay their customers. For example, some freelancers and small business owners refuse to accept credit cards to avoid paying high transaction fees.
Additionally, if customers are late in paying because the payment process is more difficult for them, the wasted time and expense of finding money can quickly outweigh the cost of accepting credit card payments.
Each customer will have their own preferred payment method, for example some will prefer direct payments to a business account, while others will prefer to pay via PayPal or by credit card. Additionally, some customers may prefer more traditional payment methods, such as sending a check. The key point to emphasize here is that you should discuss payment options with your customer before sending them an invoice to ensure that payments can be made quickly and easily.
Create a checklist of essential invoicing elements
When you’re busy, it can be really easy to rush a bill and make a mistake. Having a checklist on hand when submitting invoices can not only save time, but can also help avoid a non-payment situation.
For a quick and easy checklist, take a look at the FreshBooks Billing Essentials Checklist here.
Set up recurring invoices for long-term customers
Setting up recurring invoices is the ideal time saver. These can help speed up payments, improve workflow, and free up time for other more important business activities, especially if there is long-term work with an individual client.
You can simply enable this feature when you create an account with FreshBooks. You can configure the invoice format and schedule when you want invoices to be sent.
Set up ACH payments
ACH or Automated Clearing House is a network that connects banks. This network helps people easily and quickly transfer money between these different banks without the need for checks.
This is a great way to ensure customers pay their bills the way you want them to. It also means getting paid as fast as credit cards, with fees of just 1% per transaction.
Setting up this option takes five minutes, and it’s a simple but effective way to get paid faster.
Verhelst, says: “Invoicing is a critical procedure for all small businesses and when payments are not made on time it can lead to frustration and put undue pressure on the company’s cash flow, while having an impact on relations with suppliers.
“Having a clear and streamlined billing process will transform the payment process, so you can go through the same process every time. It is helpful to have billing software in place as it will help speed up the payment process and relieve any unnecessary stress. It will also provide suppliers with an easy-to-follow document, helping them pay invoices faster.
For more information or advice on billing, please visit the FreshBooks Blog for tips and tricks.