5 Tips on How to Make Your Billing Process Go More Smoothly

by Gilbert J Donald

No matter how long you’ve been in business, being an entrepreneur means always learning new things. This is especially true when it comes to your billing processes.

As technology has morphed the business industry into one where e-commerce is king, you’ve probably already had one major hurdle to adapt to. Now, it’s time to adjust to virtual credit cards and payment options like PayPal, ApplePay, and Venmo.

With all of these innovations changing how you send and receive payments, it can get time-consuming trying to keep up. These tips will help your business’s billing processes go smoothly, no matter what changes are around the corner.

1. Clarify Your Terms

You already know what your expectations are in your head as far as payment terms. Now, you need to set these ideas on paper in a way that makes them clear to your clients.

When the terms are clarified from the start, there aren’t any surprises. Your customers know what you expect and the consequences if they don’t follow their part.

Before working with anyone, include a “terms” part in the contract. Explain how you bill (hourly or per project), your fees, and any additional fees they might see.

Add deadlines and payment due dates along with all the types of payments you take. Then, add the penalties you charge for past-due bills.

2. Clean Up Your Invoice

Some businesses think they have to include all their payment terms on the invoice. Not only is it too late by this time for your customer to be prepared, but it’s also a case of “too much information.”

Keep your payment terms connected to the contract and initial discussion. Then, limit your invoice to the basics: your info, client’s info, amount due, payment types, and penalties for late bills. 

3. Use an Automated Billing System

An automated billing system more than pays for itself with time saved and efficiency. Older programs or manually-operated ones mean invoices get sent out once a month, no matter when the last payment was received, or the client ordered.

The right system can generate a bill for individual clients when it’s time for them to get one instead of a one-size-fits-all timeline. After the first invoice, you can set the program up to do automatic paper and electronic mail outs, schedule reminders, and send late notices.

This process takes a little time to set it up for your business. But everything is automated from there, and you’ll see a big difference in your payments received.

4. Take Multiple Payment Options

The greater variety you offer for your payment options, the more likely you will get paid. Businesses that take checks by mail only, for instance, will lose out on clients that pay their bills online.

Set up online portals that take ACH clearing house automated payments, PayPal, and other electronic options if you want faster turnaround times.

5. Have a Backup Plan

Even the smoothest billing processes have hiccups occasionally. Every business has periods of flush and lack. How you prepare for the lack when you’re in a profitable time will determine your success.

What’s your backup plan when you need working capital fast, but you know your clients are going to take the full 30 or 60 days to pay? 

Getting ahead on your bills while you’re turning a profit is one method. 

But if you didn’t get a chance to do that or you need more finances, it’s a smart idea to have an invoice factoring company you can turn to quickly. That way, you get the money you’ve already earned when you need it instead of it sitting in your accounts receivable. 

Your backup strategy is an essential part of the billing process. When it’s on point and ready to go, you don’t waste important time trying to figure out how to get the working capital you need.

Conclusion

Sending invoices, collecting payments, paying bills … all of these transactions are fundamentally the same. Money exchanges bank accounts and an expense is paid.

Focusing on this foundational characteristic guides your billing processes. From there, using these tips will streamline your system, so you’ll only have to make minor tweaks instead of major renovations when changes happen. 

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