9 Essential Tips for Creating an Invoicing ProcessSo you're ready to get started on invoicing your customers. You've got a plan in place — and now you need to execute it.
In this article, we’ll explain what should be included in your invoicing process and the best way to put it into action.
- Be Clear on Your Payment Policy
Ensure that payment terms are a clear part of your terms and conditions when providing your services. Include late payment penalties and set your system to automatically charge them and re-invoice.
- Get Clients to Pay Invoices Faster
Consider amending your invoice template to make it very clear that late payment adds a penalty. If persistent late payments are a problem, consider adding a note at the bottom of all invoices stating that late payments by a small minority create cash flow issues and you may have to increase your fees to cover the costs incurred.
- Simplify Your Payment Process
Adopt the opportunity for your clients to pay for your services electronically. CompanyOn Payments, allows you to send invoices via email or text message so your client can pay for your services online.
- Overdue Invoices
If your invoice statement reminders are being ignored, then try phoning the client to chase it up. Keep your tone friendly and try to establish the reason for non-payment. Remind them that each week or month that they have not paid the cost is increasing as you have costs to cover and your cash flow to manage.
If the problem is not resolved, remind them that you are a small business and cannot stand the expense of non-payment or late payments and will regrettably have to take further action.
- Send Invoices Immediately
If late payment is a reoccurring problem, consider changing your methods and sending out your invoices immediately after the service. While you don’t want to be invoicing daily, you could use this method for single visits and consider changing your invoicing to weekly. Prompt invoice sends a message of urgency to the customer encouraging prompt payment.
- Change to Electronic Invoicing
If you send invoices by email you know there is a good chance that they have arrived. Invoices sent by post could be lost, delayed, damaged, or misplaced. Invoices you take with you and leave on the side could be ignored, forgotten, or misplaced.
- Keep it Simple
Have clear concise invoices. There is no need for wordy descriptions and complications such as finance speak that your clients may not understand. When purchasing invoice management systems or if you employ someone to manage the invoicing make sure that terminology is kept as simple as possible.
- Habitual Defaulters Set to Implement Late Payment Fees
For new clients or those who may occasionally pay a day or two late, it’s friendly to withhold late payment fees. However, for persistent, habitual defaulters a sensible option is to ensure that the late payment fees are set to kick in as soon as payment becomes overdue.
Frequently, penalties are the perfect deterrent to stop people who are habitual defaulters.
- Cease Work Till Payment Backlogs are Cleared
As a healthcare professional you have a duty of care that puts you in a precarious position. Ceasing work has to be a very last resort once all other avenues are explored. If your client cannot pay the situation is different to one who forgets to pay or just doesn’t bother. It is worth it when you arrive explaining that this may be your last visit unless you are paid today. Or, when a third party is responsible for the payment, phone them as soon as you arrive and discuss with them in front of the client how payment is to be paid. Again, explain that you cannot work without payment and this may be your last visit.
Often the openness of discussing the non-payment in front of the client is sufficient to make the person handling their finances pay up.
CompanyOn offers a simple yet complete invoicing processing that helps you manage this aspect of your practice.
To learn more, please click here.
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