The numbers don’t lie: millions of dollars are lost per year due to lost and overdue invoices. Between the wasted time, energy and cash that goes into tedious invoicing, what can small business owners do to make the process friendlier and remove the needless back and forth and the endless paper trail?
As a freelancer, you have to stay caught up with important things as managing projects, meet deadlines and communicate seamlessly across your team, if you are working with one. But of all these obligations, the highest priority must always be to maintain a positive cash flow.
If you’re already worried about income fluctuations from month to month, this positive cash flow can get you through tough economic cycles. A lack of payments can mean the difference between paying your bills and not covering them on time. Not being paid can also impact how you save money for investments, taxes and retirement.
If you’re solely focusing on marketing your skills on a daily basis in order to generate a steady work flow as a freelancer, time-tracking your work and perfecting your invoicing system, to increase and speed cash flow, should also be a priority.
Fortunately, the nice people at Fiskl, a mobile-first start-up specializing in freelancer and small business solutions, understand the pain of solopreneurs and small business owners drowning in an endless sea of documents. Even if you’re the messiest business owner alive, their mobile invoicing solution with an integrated receipt scanner can save you time, money and the many headaches that come with regular invoicing.
In short, you can focus on getting down to business instead of fine-tuning each and every invoice and trying to track and order all your receipts.
And it comes with a free plan for those that do not exceed 5 invoices a month.
Invoicing for freelancers
Here are actionable tips on how to send, receive, and manage your freelance invoice process, while speeding up payments and potentially attract new clients:
Using an archaic invoicing system that involves a word processing program, printer, envelope and a stamp could delay payment for days, weeks or even longer. It is also an inefficient use of your time and money.
Instead, get an online invoicing system for freelance invoices. There are multiple online invoicing tools and platforms available that deliver efficiency, branding opportunities, and convenience for your clients, but only one will suit your daily needs. Find out which one is good for you and your business.
- Once you’ve chosen an invoicing system, follow these best practices:
- Use the database to store client information so that each invoice automatically populates for this information;
- Create a formatted invoice using one of the available invoice templates. Make sure that it matches your brand, including colors, and provides a way to upload your logo for a more professional look;
- Number every invoice. This is a good way for both you and your clients to track invoices that are paid and outstanding;
- Determine if you need to change the currency, taxation, and language on the invoices to accommodate any international clients;
- Detail all of the services you performed. The more information you can provide, such as date, time, and project work, the easier it is for the client to agree with the invoice amount rather than just putting a total on the bottom. By using Fiskl, you can time-track your client work and automatically add it to an invoice;
- Describe your payment acceptance methods and terms of payment, including due date and any types of fees or discounts associated with payment timing. Luckily for you, Fiskl integrates with almost all major online payment solutions so that your business will be even more flexible;
- Always include a note of appreciation for the work and relationship. Be sure to change these up each month to provide that personal touch. Clients want to know that you value them.
How your clients receive the invoice is also critical to fast payment. You are migrating to an online system of invoicing. Now, you can offer your clients a few ways to receive their invoices based on their preferences. You may also need to explain how online invoicing works and why it will benefit them.
- Sending your invoice within an email is one of the most popular methods. This method includes a button within the email correspondence that the client can click to review and pay the invoice.
- You can get paid immediately with this invoice receipt method because it is something your client can do in a matter of minutes. Also, consider accommodating their preference to receive invoices via text message or through a link that is sent through an instant messenger.
- Be sure to ask each of your clients how they prefer to receive your invoice. Then, keep track of that so you can deliver it that way each month. Write this preference tracking information down. When you have a large client list it can become confusing (seriously, some clients request unusual invoicing practices).
- If your clients receive regular invoices for the same amount because you are on a retainer, then use the recurring invoice function. It saves additional time and “trains” your clients to expect their invoice on the same day each month.
While you wish you could just automate the entire process of invoicing for your freelance business, the reality is that you still have to manage the process. This is where Fiskl can step in and help you with the process. Here are some management tips to remember to stay on top of your invoices:
- Update any changes to client information. This includes adding any new people that are to be included on the invoice. Staying current on this information will ensure that your invoice gets to the right people and your payment is not delayed.
- Set up automatic reminders for outstanding invoices to encourage payment if a certain amount of days have passed.
Design the automated thank-you email when a client makes a payment. If you prefer, you may want to send your acknowledgment via email or any instant messaging system you use like Slack.
- Track your cash flow by using available reporting capabilities to see how much you have received, what is still outstanding, and your overall revenue totals by month, quarter, and year. It’s important to follow these amounts because you can compare your productivity against your need or availability for more work.
- Weigh your options of integrating more payment acceptance methods into your invoicing system. The more payment options you offer, the greater your chances of attracting more clients. Not every client wants to pay the same way, so be sure to include a payment processing partner that works with your online invoicing system. Even if you are using Fiskl on the free tier plan, this amazing mobile-first invoicing software integrates with Paypal, Google Checkout, Stripe, Braintree, WorldPay and others.
Avoid common delays
Even if you use online invoices, send your invoice right away, and have an agreed-upon payment schedule, there are some other barriers to getting paid on time. Here are some issues that could slow payment:
- You sent the invoice to the wrong person – The project manager or primary contact might not be the person who deals with accounting, so before you deal with a lengthy back-and-forth further delaying your payment, ask your client to whom you should send the invoice.
- You weren’t clear about terms – If you think the invoice should be paid within a month, and the client thinks that it doesn’t have to be paid until the completion of the project, you’re in trouble. To avoid an uncomfortable and frustrating situation, make sure your client agrees to your terms, in writing, before you begin work. You might also consider setting a shorter payment window or initiating automatic invoices to ensure timely payment.
- You sent the invoice on an inconvenient day – Clients are least likely to pay an invoice they receive on a Sunday. But when you send an invoice on a Thursday, you have the highest likelihood of being paid within two days. Determine a payment schedule that results in the speediest payment from your clients.
Work and Cash Flow
Be sure to include your invoicing and payment methods in your marketing approaches as leverage to differentiate yourself from other freelancers, especially if you’re using Fiskl.
If your new client is still using the old-fashioned billing and payment systems, you can accommodate them with these time saving hacks. But, try to switch them to the other system as quickly as possible for both of your benefit. Progressive clients may pick you over other freelancers to fit their updated invoicing and payments system.
You can join Fiskl on the free tier plan, if you’re generating 5 invoices per month or less and get access to all the advanced features this amazing invoicing app has to offer. Their easy-to-implement processes can have you up and running in minutes with a whole new way to work, invoice, and receive payment.