Do you have a strategy for creating, sending, and tracking company invoices?
An efficient invoice management strategy can save your business time and money. It can also ease the administrative workload and make work easier for you and your employees. At its most basic, invoice management is the process of tracking and paying supplier or customer invoices.
As a time-strapped entrepreneur, your invoice management strategy should aim to reduce or eliminate two things:
- Manual data entry that’s both time-consuming and prone to errors
- Excessive double handling of data
That said, efficient invoice management isn’t as simple as automating your systems. Establishing and following a clear payment schedule and syncing your invoicing with your bookkeeping system is essential. So let’s go through some tips to help you manage this load.
Invoice Management Tips for Small Business Owners
1. Create a payment schedule
Some businesses make a point of only receiving and making payments on specific business days. Such a system establishes a pattern that reduces invoice workload, allowing you to save time. That said, every business has its nuances. Depending on the products or services you render, you can create an invoicing/payment schedule that works for your business.
For instance, setting expectations at the beginning of a business relationship is crucial. If you provide services, you may find it helpful to send a comprehensive contract that details your billing process and sets a policy for late payments. Your clients could also request to have their invoices segmented into smaller installments.
The idea here is to create a system customized to your business that will help ease the workload while providing efficient cash flow.
2. Avoid the use of paper invoices
It’s important to get things done quickly and efficiently to maintain a healthy cash flow. The best way to achieve this is to automate your processes. For example, choose an invoice management system that fits your business objectives and budget. If you’re hesitant to go digital, you may want to consult a bookkeeper for recommendations.
3. Enter exhaustive information into your invoicing management system
It can be difficult searching for invoices without an established system that lets you filter out the noise. Such a system starts with gathering data. At a minimum, an invoice should include the following data:
- Invoice number and date
- Business name and contact information
- Product or service being billed on
- Customer’s billing information and point of contact
- Invoice amount and sales tax, if applicable
- Due date/payment schedule
- Mode of payment (cash, online, check)
It’s also a good idea to customize the look and feel of your invoice template. This way, your branding is easily recognizable.
4. Audit your accounts payable and receivable regularly
Efficient invoice management lets you track your company’s financial health in real-time. What’s more, auditing your accounts and processes enables you to make changes so you can find a system that works best for your business.
Usually, supplier invoice management will be handled by your accounts payable team, which is yet another great reason to hire a bookkeeper. Outsourcing your bookkeeping means your invoices will be generated and paid on time. In doing so, your bookkeeper can improve your company’s relations with your suppliers, helping you capture better discounts in the future.
Contact Goode Bookkeeping & Consulting
Are you looking to establish an invoice management system that works for you and your business? Shannon Goode Bookkeeping is the bookkeeping consultancy for you. Get in touch to see how we can streamline your invoice management system. You can reach us at (860) 659 6543 or complete our Contact Form to schedule your free consultation.