Common Billing Mistakes (and How to Prevent Them)

common invoicing errors two people fixing them

Billing may not be the most attractive topic in the world, but it certainly is. This is the last stage of monetizing your services. However, many businesses do not consider each of the steps in the process. Here are some common billing mistakes and how to prevent them.

Don’t repeat these mistakes again

Most businesses struggle heavily with invoicing and don’t even realize they messed up. The same may be true in your own organization. In this article, we’ll take a look at some of the most common billing mistakes and errors (and how to prevent them in your organization). This is not a complete list, but it should give you a pretty decent idea of ​​the potential problems lurking under the surface.

  • Late sending of invoices

It is important that you send invoices as soon as possible. Otherwise, they can be forgotten (either by you or by the customer). Don’t wait for the client to ask for a bill. You may have a couple of attentive clients who do this from time to time, but this is not common. Your clients are busy. They have a lot of unpaid bills. The sooner yours hits that stack, the sooner you’ll get paid.

  • Lack of deadlines

Be very, very specific with payment terms and terms. Sending an open account without specific payment terms is a huge mistake that will backfire on you.

Always be mindful of who you are talking to. If it’s a small company or one person’s business, don’t assume they understand complicated accounting terms like “Net 30”. Explain this to your customers and tell them the terms in writing.

For example, instead of saying that an invoice is due 30 days after receipt, enter an exact due date, such as September 1st. This eliminates possible confusion.

Depending on the client, it is extremely useful to break down the services into a detailed list on the invoice. Some clients will not even pay attention to a bill that is not detailed. They need a detailed breakdown in order to complete their own internal accounts payable practices.

Detailing services from the start helps you stay organized and improves efficiency and speed of payment. It’s a small detail that makes a big difference.

  • Sending to the wrong person

This is big! You can get everything right with an invoice, but send to the wrong person within the organization. This either leads to a dead end, or it takes days or weeks for the invoice to get to the right person who can approve and process the payment.

When onboarding any new client, ensure that part of your process is to collect contact information for the correct person responsible for receivables. You must have multiple contact forms for this person/department.

Have you ever sent an invoice, waited two weeks, and then got frustrated that a payment was delayed and you didn’t receive confirmation of receipt of the invoice? You then followed up and received a quick apology within hours.

This happens all the time. Customers forget, the email goes to spam or something else happens beyond their control. The best way to avoid such problems is to constantly and timely monitor them. In fact, you should create an automatic follow-up sequence at predetermined intervals so you don’t forget. Paperless invoice processingwhich is fully digitized makes it easy to do so.

A single mistake on an invoice can unnecessarily delay payment and slow down receivables. Double-check everything before sending an invoice. This includes account number, amount, due dates, service details, spelling errors, etc.

Don’t make payment unnecessarily complicated. Try to include as many different options as possible.

Offering multiple payment options is one of the easiest ways to avoid late payments, common billing mistakes, and frustrated customers. It may take a little more fine-tuning on your part, but the most important thing is simplicity and convenience for customers.

Improve your billing

Improving your billing system can make a big difference in your business by increasing efficiency, reducing frustration, and increasing profits. If you haven’t studied or assessed this part of your business in a long time, now is the time to study and analyze your processes with greater accuracy in order to correct common billing mistakes.

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