While invoicing clients may not be the most enjoyable task in the world, it is vital that you ensure that you keep getting paid on time. Otherwise, the cash flow can end up taking a hit, which can impact your business negatively in all sorts of other ways. There are a number of components involved in the effective invoicing of clients, and this article will be looking at as many of these as possible. 

Set Out Your Expectations in the Contract 

When you send out the initial contract or invoice, you need to ensure that the expectations are clearly set out in terms of when you expect to be paid. Make sure that this is clearly set out rather than buried away in the small print. You should include some clear information about how payment can be received and any penalties for late payment. You may even include bonuses for early payment. Whatever system to chase up payments, it is still a good idea to ensure that everybody is on the same page right from the start. 

Use Invoicing Software 

Invoicing software is an increasingly popular way of getting paid by clients. There are a number of different advantages here in that the invoice templates can be made and stored online, and clients are able to pay online instantly. If you have to work between different currencies, this can also be useful in ensuring that the conversion rates are more effective. One popular option is using an accounts receivable solution. Not only will you get paid 2x faster, but you will also simplify the tracking and follow-up process and send all invoices with flexibility. 

Ask for a Deposit 

If you are signing up clients to a big contract or you are fulfilling an especially large order, asking for a deposit is not a bad idea. There are two main things that it helps to accomplish. First of all, it helps to put off any clients that are less likely to keep paying on time. By putting this clause in place now, you help to prevent any future issues from arising. Responsible clients should not feel like this is an unreasonable thing to ask. The second advantage is that it sets the overall tone for the invoicing process, and you can establish the payment method right from the offset. 

Include Enough Detail on the Invoice 

When you are putting together the invoice, it is important that you include enough key information on it. To start off with, this means having all of the basics, including contact information. You should also double-check to ensure that you are sending off the invoice to the right person to stop any delays from occurring. You should also include some basic level of description of the work that has been completed rather than just one or two words. This helps to convey an extra level of trust in your clients. The invoice should also include some info on late payments. This will help to encourage them to pay on time and also ensures that nobody should be left shocked. 

Present the Invoice in a Prompt Manner 

To ensure prompt payment, you are better sending off the invoice sooner rather than later. This means completing the work and not hanging around to send the invoice. Otherwise, it is not going to be fresh in the minds of the clients, and you are more likely to have to chase them up further down the line. Again, this ensures that you give off the impression that you are a reliable and efficient business.

Aim to Move onto a Retainer Contract 

If you are engaging in some work over an extended period of time, you can try moving the client onto a retainer contract. This way, you can keep the payments coming in on a regular basis rather than having to wait until all the work is actually completed. Making your cash flow situation more predictable and regular can help your business and allows you to plan for the future rather than worrying about your invoices getting paid on time. If clients are satisfied with your work, they are more likely to be happy to move onto a retainer contract. 

Build Relationships Based on Mutual Trust 

When you have been in business for a long time, you start to build up relationships with your clients that are built on mutual trust. At the same time, you will probably start to identify the warning signs that tell you that a client is simply not reputable. You can then avoid working with them entirely as you have enough regular income to cover your bills and beyond. 

By establishing a series of good invoicing practices based on the information that we have offered above, you can help to ensure that your business cash flow is managed effectively and your company thrives as a result.