Your company may do splendid piece of work, have dedicated squad members and serve a great group of customers, merely if its invoicing function isn't performing properly, you won't exist in business organisation for long.

Invoicing is foundational for whatever company. The process also requires accurateness and timeliness. Become information technology wrong, and yous won't get paid or y'all'll get paid late for your products or services, which really impacts your cash flow. And when y'all don't get paid, yous can't recoup your employees or comprehend your overhead.

Errors in the invoicing process can also stir up customer suspicions about your business practices. Repeated errors will heighten these potential cherry flags fifty-fifty higher and force your customers to rethink whether they desire to practise concern with y'all (or not).

The good news is that there are steps you can take to reduce invoice errors and instill a high rate of conviction within your client base.

6 Invoicing Problems and Solutions

  1. Missing Invoices

    If invoices aren't getting to their intended recipients, they're non going to get paid. And if yous're using net thirty payment terms with your customers—and you don't receive automatic confirmations of receipt—so it may exist a month or more before y'all even realize that the invoice is missing. This can significantly impact cash period, non to mention force you to start the invoicing procedure all over again.

    Avert this problem past using financial software that non just automatically mails or sends invoices directly to the right person in your customer's accounts payable department, but that also alerts yous when the invoice has been opened and viewed. Brand certain the right email address is associated with each customer's account and that you regularly check for "unviewed" invoices. That'south a signal that they're non being received or reviewed. Look for an automated system that can be set up to flag and alarm you lot when invoices take gone unviewed for a certain menstruum of fourth dimension.

  2. Confusing Invoices

    While the language used on your invoices may be clear enough to you (nosotros performed X task in exchange for 10 number of dollars), your customers may view that messaging through a different lens. This can pb to defoliation over invoices, and it'south peculiarly problematic if you are selling multiple different products or services to the aforementioned customer, and invoicing them multiple unlike times.

    Circumvent this trouble by being as clear as possible with your invoicing language and format and by using the original buy order (PO), job quote or other documentation to come with your descriptions. Past making the invoice as simple to understand equally possible, the approval procedure will get more smoothly because both the bookkeeping section and the approver understand exactly what they're paying for.

  3. Missing Information

    If you want your invoices to be paid on fourth dimension and without the demand for additional homo intervention, they have to be accurate. When the data that customers require to be able to process invoices is missing, there'due south a practiced chance your payment will fall to the dorsum of the line until someone figures out the trouble.

    For example, instead of simply using "upon receipt" as a due date, be very specific about exactly when an invoice is due. That will help your customers manage their own payment schedules without having to guess at when an invoice is actually due. Note whatsoever discounts or incentives for paying early also as late penalties and types of payments accepted.

    Having consistent, updated data beyond your systems is crucial, which is why information technology helps to have an enterprise resource planning system (ERP) to tie it all together. Your automated system should flag these types of issues for y'all, or yous can review them past hand to ensure all fields are filled in with logical, relevant information. Either mode, have a process in place to thoroughly review invoice data before hitting "send."

    icon invoice

    • Detailed, itemized list of invoiced items.
    • The engagement invoice was issued.
    • Billing breakdown: Did yous accuse hourly or past the projection? Are there whatsoever fees broiled in?
    • The types of payments accepted and exactly how to pay.
    • Due date—and clarity is key hither. Mutual phrases that can cause defoliation include: "Due 10 days from receipt.", "first working day" and "end of calendar month". All are vague. Instead, utilise "Due X days from invoice event date."
    • Any discounts or other incentives for paying early on.
    • Late penalty details, if applicable.

  4. Errors in the Invoice

    Mistakes happen. Mayhap you forgot to itemize the services that team members performed, or perhaps y'all didn't realize that your customer needed its purchase order printed on the invoice in a specific way. Maybe yous charged twice for the same product or service, or perchance you put the decimal point in the wrong place—effectively turning that $1,000.00 service into a $10,000 obligation.

    You can minimize or eliminate invoice errors by using an automated fiscal platform that does the math for you, alerts you lot when form fields are left vacant and incorporates customer-specific requirements, like that required PO number. If you're managing invoices manually, be sure to double-check your math and ensure that all fields have been filled out before sending.

    By taking this "last look" at your piece of work, you'll be able to significantly reduce the number of remittances delayed due to invoice errors.

  5. Recurring Invoice Mistakes

    Every bit mentioned, wrong pricing, inaccurate math, missing payment due dates and other oversights tin all lead to payment delays that no visitor can afford. When these mistakes happen over and over, they lead to mistrust inside your customer base. When a finance person must take the time to circle back and figure out the trouble, determine how many cycles were affected, calculate the necessary adjustments and make certain it doesn't happen again, you're costing that customer a lot of fourth dimension. Even when errors are unintentional, you could harm the relationship or even lose that customer.

    To forbid recurring mistakes, dig down and effigy out the root causes. 1-off fixes are simply wasting everyone's fourth dimension. For instance, if your automatic system is pulling pricing information from a database that hasn't been updated in six months, pull the plug on issuing invoices until the database tin can be refreshed. Or, if your manually generated invoices are decumbent to math issues, double-cheque each one before sending. Having a happy customer that pays promptly will be well worth the extra time spent.

  6. Wrong or Missing Contact Information

    Most companies have a specific email box or employee to receive all incoming invoices. Larger companies may have multiple people handling this task across diverse corporate divisions. If your invoice doesn't become to the correct person, there's a good chance it lands in the "lost letter pile" of invoices that never get paid. If you weren't expecting to become paid until 30+ days after sending out the invoice, it will be at to the lowest degree a month before you catch the trouble.

    Solve the issue proactively past confirming—and reconfirming—the correct recipient for your invoices, knowing that there may be multiple different employees assigned to your account, depending on the diversification of your products and services. Also realize that people move into new positions or get out companies altogether, so review and update contacts on a regular schedule, say every six to 12 months.

If you're making any or all of the invoicing mistakes outlined in this commodity, recollect most how these seemingly small errors are impacting your cash flow and bottom line. Possibly more importantly, consider how they are negatively impacting your customer relationships. By taking the advice outlined here, y'all tin can sidestep many of these issues, improve your customer relationships and run a more than profitable organization.