Sending invoices to your customers is obviously a very important step in receiving payment. But you would be surprised to learn that many business owners have a poorly constructed invoicing system and mistakes are made constantly.

These small invoicing mistakes can lead to larger problems for your business, such as dealing with late payments. We all know that reoccurring late payments have a negative effect on your business’s cash flow.

So here are 8 invoicing mistakes business owners make and how you can avoid them.

Mistake 1: Not Sending Your Invoices Immediately.

A lot of business owners are so busy that some invoices aren’t sent to clients for days, sometimes even weeks!

Not sending out your invoices ASAP encourages your clients to take their time paying you back.

Using an automated invoicing system can do wonders for you if this is an issue for your business.

Mistake 2: Not Clearly Providing a Due Date.

Be clear with your terms and avoid giving vague instructions. Here are some examples that are used regularly but should be avoided…

“Upon receipt” – This tells your client to pay the invoice as soon as possible. But “as soon as possible” can vary from client to client.

“Net 30” – This makes almost no sense to those who aren’t business savvy.

You need to be extremely clear to your customers about when the due date is.

For example; if you want to be paid in 14 days and you submit your invoice on the 1st of September 2019, set the payment due to the 15th of September 2019.

Mistake 3: Sending Invoices To The Wrong Person

Before you send any of your invoices off, take the time to make sure the right person in the company will be receiving it.

Too many business owners have made the mistake of sending the invoice to their contact at the company. A week goes by and the invoice still isn’t paid. After chasing it up you get told that the invoice was meant to be sent to person X.

This puts you a week behind in payment and you have to start the invoicing process all over again.

Mistake 4: Not Restating Terms

It is important to go into detail with your invoices and provide a detailed breakdown of services and costs to avoid scope creep.

This is a simple way to have you covered as customers can, at times, create more demands on your time by asking for additional revisions and modifications after you have invoiced. 

By restating and providing at much detail as possible you remove the possibility of this happening.

Mistake 5: Not Following Up

You’ve sent your invoice off, a month passes and still, no payment has been received on your end. Have you followed up with them?

While there are some people out there who will wait it out for as long as possible to make a payment, the majority of people simply just forget. In either case, by following up with your customers, you will collect payments a lot faster.

Automating your payment reminders is also really powerful.

If you feel like you don’t have the time or just want to outsource this step, platforms such as Pencil set up automatic reminders to customers, asking for payment so you can focus on other things inside your business.

Mistake 6: Making It Difficult To Pay

One of the most important parts of your invoices is your payment methods. You can’t be paid unless you offer a way for your customers to pay you.

You need to be clear to your customers so they know exactly how to pay you, whether it’s via BPAY, Paypal, etc.

Always as yourself how you can make things easier for your customers. If the ability to pay isn’t one click away, you should consider changing this.

Mistake 7: Having Hidden Fees

No one likes hidden fees… Always communicate honestly with your clients.

If you have needed to do extra work on a project or some other fees have come up, speak to your customer about this before invoicing.

Mistake 8: Having Errors In Your Invoices

There is an old saying. Measure twice, cut once.

Before sending out your invoice, make sure the due date, the invoice number, and customer information are correct.

If you have been creating your invoices on Excel manually, you have probably made one of these simple mistakes. Consider upgrading to an online invoicing system to not only avoid these mistakes but it will save you A LOT of time in the long run.

PencilPay Makes Invoicing Easy!

A lot of these invoicing mistakes are made because business owners go through this process manually.

This not only makes mistakes common but also drains you of your time.

When it comes to sending invoices and following up with customers to get paid, Pencil can do this all on auto-pilot for you.

We have seen businesses using Pencil receive 80% of their invoices within 5 business days!

If you are interested in trying PencilPay, jump on a demo with us and we can set you up with a free trial.