If you’re like most freelancers or entrepreneurs, invoicing is something you don’t just put off doing, you put off even thinking about doing it. It’s that annoying step between working and getting paid. And when you finally do get around to invoicing, you probably do it mechanically and as quickly as possible. The fact is, though, there is such a thing as good invoicing and bad invoicing, and the difference could be costing you some serious cash.
Invoicing is a craft. It’s something you can get better at. And the first step to improving your invoicing is taking stock of how well your invoicing is going at the moment.
Consider these three basic indicators and then check out the SlideShare below that has some great tips for immediately improving your invoicing.
1. How many invoices are currently past due?
Invoices are not as good as money. Too many past-due invoices mean you have two problems: a cash-flow problem and a respect problem. Clearly, something you’re doing isn’t working, and your bank account is suffering because of it. If you consistently have a problem with invoices going past due, chances are your clients are not the problem — you are. You haven’t set expectations. You haven’t established consequences. If a client knows they can put off paying your invoice for a month or two, of course they’re going to put it off. And then you won’t have access to the money you’ve earned, which is essentially the same thing as losing money.
2. How many invoices in the past year have never been paid?
Not getting paid is as frustrating as it is embarrassing. It’s hard to confront a client or a customer, and it’s even harder if you don’t know how. Luckily, once you get better at invoicing, the number of invoices that don’t get paid will drastically fall. Often to zero. So take a good hard look at the past year. How many invoices did you write off? How many clients either refused to pay or seemingly fell off the map? If you have more than one or two, you have an invoicing problem.
3. How often are you following up on invoices?
If you think following up on invoices is a bad thing, you’re wrong. If you’ve never followed up on an invoice you’ve sent, you’ll be amazed at how much more effective your invoicing can get. Do a quick mental tally: How often are you following up on invoices? If the answer is “rarely,” then chances are your invoicing can become a lot more effective.
So. How’d you do? Improving your invoicing isn’t hard, but it will make a huge difference in the amount of time it takes you to get paid. Do a quick evaluation of the state of your invoicing. If you think it could use some improvement, check out the Slideshare by Blinksale below.
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