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There are many enjoyable things about self-employment and admin isn’t generally one of them, but it’s unavoidable when you run your own business. It’s understandable that you might prioritise client work or winning new contracts over admin, but if you procrastinate and let things slip it can have a negative impact on your business.
Late payments can be extremely frustrating for the self-employed. You work hard, deliver a great service and complete your projects on time, but then could be waiting a long time for clients to pay you.
The fault for this can often lie with the client. Maybe they’re disorganised or maybe they’re experiencing cash flow issues and are putting off paying until things pick back up. But there is another side to the story which is the habits and psychology of the business owner and how they invoice.
Various factors are at play but in terms of whether you get paid on time and a major one is your invoicing process. Having the right tools in place and being consistent and clear are important and good invoicing practice can only be of benefit to your cash flow and your business.
In this post we’ll explore how to optimise your invoicing habits and processes and how accounting software can help.
The Importance of Good Invoicing Practice
Your clients will take note of your invoicing habits and patterns. If you send an invoice late it can give the impression to clients that it’s not urgent to pay you. On the flipside, if invoices are issued immediately, professionally and with clear payment terms and due dates, expectations are set that the payment is important and you expect it promptly.
Every day or week that you send an invoice late will delay the date that you get paid for your work. Over time this can snowball and create gaps in your cash flow that could mean you have difficulty paying your own bills or have to dip into your overdraft. It’s important therefore to recognise if you are procrastinating when it comes to invoicing and get a structured, consistent process in place.
Here are some good invoicing habits than can help expedite things:
- Be Clear: If your invoices are unclear, confusing or contain errors, payment will likely be delayed
- Be Prompt: Invoice clients as soon as work is completed. An invoice that’s sent late will often be paid late
- Be Consistent: A structured, consistent process means your clients will respond in kind and develop good habits in terms of paying
- Be Persistent: When clients don’t pay on time, ensure that reminders (or final reminders!) are sent at set intervals
If you develop good invoicing habits, your clients can respond in kind and develop good payment habits to help eradicate delays and bottlenecks.
Have the Right Processes and Systems in Place
Developing good invoicing habits is one thing, but having the right systems and processes in place to support that is also key. This helps to ensure consistency and clarity and makes effective and efficient invoicing second nature.
- Never Invoice Late: As soon as a project or chargeable milestone is completed, invoice immediately
- Block Out Time For Invoicing: Set time aside each week to dedicate to invoicing, reconcile your payments and check everything is in order
- Set Payment Terms: Make sure that your payment terms and clear, standardised and consistent so expectations are set with your clients
- Use Templates: Use clear branded invoice templates for initial invoices, chases and final reminders to ensure clarity, consistency and professionalism
- Automate Your Reminders: Use automation in accounting software, such as FreeAgent or Xero, to automatically chase non-payers
- Make Sure It’s Easy for Clients to Pay You: Remove friction in the payment process by providing multiple payment methods and include clickable payment links in your invoices
By combining clear, consistent processes with the right tools, invoicing becomes far less of a headache. Instead of chasing payments or worrying about delays, you create a streamlined system that encourages prompt payments, supports your cash flow and frees up more time to focus on growing your business.
How Accounting Software Makes It Easy
Accounting software such as FreeAgent and Xero streamlines the invoicing process by removing repetitive admin and reducing the risk of mistakes. With everything digitally tracked and updated in real-time, you gain a clearer picture of your finances while saving hours of manual effort. The result is a more accurate, efficient process that keeps your invoicing running smoothly.
With accounting software such as FreeAgent or Xero, you can:
- Invoice clients from your phone immediately as soon as work is complete
- Configure automated reminders for unpaid invoices so no manual input is needed to chase
- Track overdue invoices so you know where you stand and nothing gets missed
- Further reduce the manual input needed by scheduling recurring invoices for repeat work
- Integrate payment options into your invoices so clients can easily and securely pay you online
How an Accountant Can Help
Accurate and timely invoicing isn’t just about keeping money coming into your business consistently, it’s also about peace of mind. Through a combination of good invoicing habits, being proactive and having the right systems in place, you can develop an efficient invoicing routine with minimal input needed.
When your finances are under control and you’re getting paid on time, you’re not left worrying about whether you can cover your own bills or wasting time chasing late payers. That stability and predictability reduces stress and gives you more time to focus on delivering for your clients and growth..
Having the right support behind you is vital, and this is where we come in! We provide Making Tax Digital-compliant FreeAgent or Xero accounting software inclusive with all our accountancy packages saving you up to £330 a year. Using accounting software enables you to automate the majority of the invoicing process helping to improve organisation and accuracy.
And the benefits of accounting software go way beyond invoicing with automation doing the legwork on a variety of time-consuming admin tasks including bank reconciliation, tax calculations and report generation. Record keeping is also massively simplified – just scan and upload receipts when costs are incurred and the software will read the receipt and automatically categorise it. Accounting software and the support of an accountant can be transformative for small businesses.
We provide you with your own dedicated accountant who will be on hand to onboard you with FreeAgent or Xero to maximise the benefit to you. They will expertly manage all your business and personal accounting needs and provide unlimited support, advice and guidance with a guaranteed same working day response. Thanks to collaborative access, your accountant will also have access to your accounts via the accounting software helping them to proactively manage your finances and focus on strategic advice to push your business forwards.
Request a callback today to speak to an accountant or get an instant online quote.
