A company's billing process is one of the biggest sources of issues and errors in small business operations. Late payments and other issues can have a serious impact on your organization's cash flow. Having an efficient process set up helps prevent outstanding invoices not being paid. Keep reading for our short guide on how to improve your billing process and become an even more successful business.
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Improving your billing process
There are several key steps to go through when improving your billing process.
Payment terms
It is crucial to establish a clear agreement with the client on what your payment terms are. This includes clarifying the types of payments accepted, payment deadlines, any late payment penalties, and how the amount on the bill is calculated. Having clear payment terms agreed on early in the client relationship can help prevent the tedious process of chasing late payments.
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Automation
Automating your payment process can help streamline your billing and collection process. There are several automation tools available to help you create invoices, send overdue invoice reminders or create invoices using templates. By automating and replacing things like manual data entry, using billing software can help maximize efficiency and eliminate the potential of human error.
Payment options
The more payment options you allow, the smoother the payment process will be for the clients. Having several options in your billing system can also help attract international clients. You could even consider alternative payment options, for example, cryptocurrency, to maximize the scope of your company’s payment methods.
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Mistakes in invoicing
It is crucial to keep the number of mistakes in your invoicing process as low as possible, preferably at zero. Mistakes can slow down billing and collection considerably. Eliminating manual data entry by using billing software can help reduce errors. If you decide to go manual, have your team double-check every document before you send invoices.
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Direct debit payments
Direct debit as a payment method can help reduce late payments as it just pulls the amount on the due date. Customers do not have to take any action which reduces the opportunities for error.