5 Things Small Businesses Hate about Invoicing
Invoicing can be a win/lose proposition for small businesses. On the winning side, MONEY! Invoicing your customers contributes to the cash flow your business needs to operate and thrive. On the losing side, invoicing comes with convoluted, manual processes that steal an inordinate amount of time from your busy work day.
But what exactly makes invoicing so unbearable? And more importantly, what can you do to fix it?
Invoicing Pain Point #1: There’s too much paper.
Paper is THE productivity killer. It requires manual labor—and a lot of it. Plus, its transparency factor is practically nil, it’s hard to organize, and printing and mailing it is a tedious task.
Right now your paper invoicing process may look like this:
- Research the amount due against past invoices and the month’s activities, including digging through past paper files and trying to locate other paper documents.
- Create the invoice electronically, checking the remittance information several times to make sure there are no typos or errors.
- Print the invoice.
- Stuff the invoice into an envelope, address it, stamp it, and drop it in the mail.
- Wait for the invoice to be delivered.
- Wait for the payment.
Solution: If the idea of surfing a paper tsunami doesn't thrill you, move your invoicing online. You’ll benefit from electronic invoice creation, immediate delivery online, and the ability to easily store and grant access to documents such as past invoices, contracts, and payment history.
Invoicing Pain Point #2: It takes too long to get paid.
The consequence of taking a long time to get an invoice out the door (we’re looking at you, paper) is that it contributes to a longer window of not getting paid. Simply put: The customer won’t get the invoice in a timely manner. And you won’t get paid quickly.
Another complication that many businesses face? A lack of payment options. If your business is married to paper checks for payments, you’re severely limiting your clients’ payment ability. For a majority of individuals, it’s easy to pay online—via ACH transfer, EFT, and credit card. Paying by check, however, requires more steps. If it’s an individual, they find the check book, write the check, stuff it in an envelope, and mail it to you. If it’s a business, the process of printing and sending a physical check can take weeks to complete. Either way, you’re waiting and waiting for that payment to come through.
Solution: Add online payment options such as ACH, EFT, and eChecks. When the customer hits pay, that money goes directly into your bank account. That knocks off a significant amount of waiting time for your business. Even better, with a solution like Bill.com, you and your customers can set-up recurring payments. That way, the minute you create the invoice, it’s automatically paid.
Invoicing Pain Point #3: Reminding people to pay.
It’s the 30th. All invoices are due. So who has paid and who hasn’t?
Tracking down the information is time-consuming. Even worse: Those painful payment reminder calls.
Solution: Embrace automated reminders. A cloud-based AR solution will automatically send out reminders to those customers that have not paid by a certain date. You can customize what the message says and who the reminder is sent to. That way, you can just skip reminder calls altogether.
Invoicing Pain Point #4: Researching customer questions.
You’ve gotten your invoice out. The customer has it. But now, he or she is calling with questions. Why is the invoice a different amount than anticipated? What is included in the charge? Can you send documentation to explain the amount?
It’s not that you don’t want to clear this up for your customer. It’s the fact that you’ll have to dig through piles of paper, potentially track down someone else in your company to help with the questions, and then commence an epic game of phone tag to exchange the information.
Solution: Enable an online customer AR portal. With this portal, customers can securely and easily view their invoice, access payment history, and view supporting documentation. If there are questions, they can note them online. You’re notified and can respond online as well. All the communications are streamlined, stored, and available for review at any time. An online customer portal also enables a level of self-service, so customers can find the information to answer their own questions if they prefer.
Invoicing Pain Point #5: Data entry.
Raise your hand if you like data entry! Anyone? Anyone?!
No one likes to tackle data entry. It’s mind-numbing work and it takes a substantial amount of time. Because of these two reasons (and more), that means it often brings about errors. One or two typos or transposed numbers can throw a wrench into your cash flow and reporting.
Solution: Sync your systems. If you accept online payments through Bill.com (for example), you can sync it with accounting systems such as QuickBooks Online, Xero, NetSuite, and Sage Intacct. That way, the minute a customer pays online, that information is transmitted to Bill.com and then reconciled in your accounting software. No data entry is required. It’s efficient and incredibly accurate.
Invoicing doesn’t have to be a financial pain point. Don’t believe us?