Invoicing Errors—6 Common Slip-Ups by New Small Business Owners


Invoicing-errors

A study on invoicing conducted by Market Invoice, later rebranded as Market Finance, has revealed that around 60 percent of invoices are paid late. Given this reality and the importance of positive cash flow for your small business, the significance of a proper invoicing system cannot be understated. Getting paid on time is not entirely up to you, but there are several aspects of an invoice that you might be neglecting. And this could contribute to the late or non-existent payments from your clients. Here are the most common mistakes that you need to avoid.

  • Not having an optimized template for your invoice
    Your invoice, despite being a standard document for requesting payment, requires a lot of details to be entered correctly. This is where the eye-catching templates, provided free of charge by Cloud Books, comes in handy. It is crucial to get all the details of the invoice correct as this eliminates confusion between the stakeholders and ensures on-time payment.
  • Not setting clear terms of payment
    It is easily the mistake with the direst of consequence. Not agreeing to clear payment terms will land you in major trouble. Make the terms as clear as possible. Avoid complicated jargon that the general public find difficult to understand. An easy to understand payment terms will help you cash flow seamlessly.
  • Not having the right person to reach out to
    Many small businesses make the mistake of addressing the invoice to the wrong person, leading to avoidable delays. Your person of contact is most likely someone from finance or legal team of the client’s company. You have to take the initiative to find the right person to mail your invoice to. This goes a long way in ensuring on-time payments on every occasion.
  • Not setting a specific due date (and a penalty for failing to comply)
    Small business owners must have a specific date on which they expect to be paid. Failing to do so can cause delays in payments for your services, leaving you to encounter issues with your business operations due to the shortfall in the revenue. Apart from reminding your client frequently (your invoicing software takes care of this), you also need to set in place penalties for delay in payments. Some small businesses also offer discounts for making payments before the due date, but they collect the full fee if the payment is made on the due date.
  • Making mistakes or leaving out crucial information
    This is one of the costliest mistakes you can make. Your payment could be delayed, if you leave out crucial details, such as reference number, product description, name and contact details, date of service provided, etc. Therefore, before sending the invoice, you should check it thoroughly for spelling mistakes and ensure it is sent to the right person.
  • Forgetting to back up the original file
    A surprising mistake small business make with their invoices is forgetting to back up the original file. You have to make sure it doesn’t happen. Invoices need to be backed-up and stored on the cloud so that they can be easily retrieved for the purposes of auditing or making changes on it.

Bottom-line
A robust and feature-rich invoicing solution is beneficial for a small business to operate without complications. While some invoicing mistakes are unavoidable, having a system such as the one provided by Cloud Books can mitigate the hassles and fix the errors brought about by flawed invoicing. Due to its excellent tracking abilities, timely remainders for payment, and simple ways to correct invoicing mistakes by small businesses, Cloud Books has emerged as the invoicing software of choice for many.

Crafting an Effective Business Invoice—The Key Elements


A business invoice is one of the most crucial documents that an enterprise creates, as it directly affects when and on what terms they receive payment from their clients. It also assumes a huge role in business for reasons such as record keeping, business analytics, easy tax filing, and legal protection.

An effective invoice is especially necessary for a small business sending out their first few ones, as it shows the client how professional they are (or are not). Therefore, a small business invoice has to encompass all the elements discussed below.

What is a business invoice?

A business invoice, which is also called a bill or a tab, is a document issued by the seller of a product or service, letting the customer know that payment is due.

         Also Read: How to Choose a Small Business Invoicing Solution: The Complete Guide

What should an invoice look like?

An efficient small business invoice has several features that differentiate it from the ones that get lost in the client’s mail.

  • The word ‘invoice’ and the company’s logo: For easy identification, these two elements are to be prominently displayed on the invoice.
  • Invoice number: Every invoice you send must have a unique ‘invoice number’, ‘reference number’, or ‘purchase order number’ to make it stand out from your other invoices.
  • Date of rendering the service: Adding this element saves time during cataloging.
  • Date of sending the invoice: Emphasizing this detail goes a long way in ensuring on-time payments.
  • Name and contact details of the seller: The client has to be provided with these details, so they can reach you if they need any clarifications.
  • Name and contact details of the customer: Including these details to the invoice is crucial, as they provide it with the necessary legality.
  • Terms and conditions section: Pay extra attention to this section. This part has to include the company’s terms and conditions for the transaction, such as the due date and the penalties for non-compliance. Also, worth noting is the fact that the terms and conditions need to be easily understandable.
  • A brief description of the service provided: Adding a line or two about the product will go a long way in clearing ambiguity about the bill.
  • Cost per unit of product or service rendered: A lot of confusion can be avoided by adding this information to the invoice. This allows the customer to easily determine that the billing amount is accurate.
  • Rate of the tax imposed: Stating this separately provides the client with a clear idea of how the billing amount was arrived at.
  • Total amount due: Another key to a good invoice is the ‘total amount due’ section. This gives the client a way to check if the rates add up and if it coincides with their calculations. Also, another important element to be added in the invoice is the currency in which the amount is mentioned.
  • A personal touch: This is the step that separates a professional business invoice from an amateur one. Take the time to add a personalized note, such as a line thanking the client for the business. It goes a long way in showing the client that you appreciate them.

Hacks to make your life easier

Getting an invoicing software online to manage small business billing needs has been recognized by many as the prudent option. Invoicing software is objectively more convenient and saves money and time. Generating an invoice has also become free with the emergence of market players such as CloudBooks, whose small business invoice template can be found here. So go ahead and send your invoice with confidence—successful and timely payment is one efficient invoice away.

How to Recession-Proof Your Business


Everyone is saying a recession is approaching, with increasing pandemics and social disruption, it definitely is about to hit the global economy. But that doesn’t mean you have to shut shop. There are ways to protect your business in the lows of economic fallout.

A recession doesn’t mean all SMEs go bankrupt. In fact, according to federal data in the US, only 170,000 small businesses out of almost seven million shut shop during the 2008 recession. Although the rest weren’t exactly flourishing, they managed to survive for another ten years. While some of the businesses actually made huge sums of profit others managed to get a better understanding of what to do during a recession. But before we dive into all that, we must understand what an economic recession is. Well, an economic recession is simply defined as two continuous financial quarters of negative economic growth followed by a stock market crash and widespread unemployment, and further followed by a crunch in consumer spending, and bank defaults. And the one that worries SMEs: an increase in bankruptcies. But it is not a norm, and there are ways to withstand another Great Recession.

Here are a few measures that will help you tide over difficult times.

Financial expense tracking and analysis
If you don’t have an expense tracking and financial strategy already in place, its time you get one. The first thing that stops during a recession is your cash flow. If you don’t have an expense tracking system that automatically sums up your expenses on a daily basis, there is a high chance you will miss out on reading the red flags early on. A recession is a gradual and then explosive economic shift. And if you only look at your budget during the tax season, you wouldn’t know how to make good cuts when a financial crisis comes knocking your door. This will also improve your spending habit and make sure you are not wasting money.

Good employees make a great business
The people making your sales on a daily basis are your biggest asset. They are working towards your success, and its best to not ignore them. These very people can make sure your business survives no matter what because they have a vested interest. Hence, you should make sure they are well trained and really a part of your team. The first thing employers start doing when a recession hits is fire employees who don’t contribute, that is silly because you hired such people in the first place. Therefore, you need to have a talented lot as your team, not average people with a degree, but talented and motivated people. The point is, your employees make your business, you should take care of them, and have a recession salary cut agreement with them, so you don’t lose the most valuable asset. And train them effectively so they can sail through the recession with you.

A solid marketing strategy
The most underrated aspect of a good business is the friendships you create. If you have a solid relationship with your client, they are likely to not drop you when times are tough. And the best way to build a relationship is through a good marketing strategy. Get to know your clients, and make them understand your ethics and values as a business through marketing channels. This may mean nothing when you have loads of clients but when your clients are making budget cuts, this will play a very big role in determining what they hold back and what they let go. It is also, therefore, important that you are flexible with payments. Even if a client is willing to retain your service during a recession, they might not be able to pay you upfront. You can set up installment system for the said clients.

                       Also Read: Recession-Busting Tips for Small Businesses

Concluding thoughts
It is almost impossible to make a business 100% recession-proof, but by adopting these measures, you can ensure your business’ survival during tough times.