Invoice Processing: Strategies and Best Practices
by Erica Nelson on February 26, 2015
One of the business goals of many companies is to minimize their bad debt and days sales outstanding (DSO). This can be done by employing billing and invoicing processing strategies to maximize the amount of bills that are paid promptly and on time.
5 invoicing strategies and best practices to ensure that bills get paid on time:
1. Make it easy for clients to get in touch with you: Many bills go unpaid because clients have questions that only you or your representatives can answer. If you assume that your clients already have your contact information, you’re probably right—but why make them hunt for those details when it’s time to pay their bill? Be sure to place clear contact information on your invoice to make contacting you easy and convenient. This should include your phone number as well as an email address for customers who are hesitant to pick up the phone.
2. Ramp up communications and customer service: Ensure that your representatives are responsive to incoming communication related to invoices. If, for example, someone calls after normal business hours and receives an automated message promising a return call the following day, make sure that call actually occurs.
3. Maximize the ways in which customers can pay: The more options for payment you give your customers, the more likely they are to pay. Offer a variety of options and note these on your invoice, from paper checks to automatic checking account deductions to bank transfers. Having several choices might make your invoice processing a little more complicated, but will give your clients more avenues of payment.
4. Provide an itemized breakdown of costs: It’s important to remind customers of precisely what products or services they received. This will both remove any confusion about the total amount owed and communicate the value of the work you did, making future transactions more likely.
5. Make payment terms and deadlines clear and visible: You don’t want there to be any confusion about payment deadlines, or about any penalties customers will incur if they miss those deadlines. Put your payment deadline and penalties for late payment near the top of your invoice.
Working with an accounts receivable recovery partner can help your business to improve collections by solving problems as they come. Instead of waiting until a bill is already overdue, an accounts receivable recovery partner can help streamline your invoicing processing strategies by using clear and detailed information about deadlines, penalties, options for payment and how to contact your business with any questions.
For more information about improving your invoicing and other accounts receivable practices, contact us today.