How to design invoices which get you paid promptly
Cash flow is the lifeblood of any business. Your business can generate millions in sales and profits, but if you are not getting paid on time, your business is going to suffer.
A business has to pay the employees, suppliers for inventory and also have to pay for other expenses- all requires constant stream of cash flows to the businesses.
Despite this, many businesses are not paid on time even against the completed and delivered work.
Businesses use invoices to charge their customers, however, if you are not paid on time despite raising timely invoices, your invoice may be missing following three key ingredients:
Rapport with your customer
Your invoice must contain the details of what is being delivered to your customer. It must contain the details of what you delivered and under what agreement between you and your customer.
If your clients are established and old, it may be OK to mention some legal language in the invoice. However, if your client is a young millennial, she may feel threatening or offensive when reading references to legal agreements in your invoice.
While establishing rapport, adapt the language of your customers and do not be rigid.
The Payment behavior of customers change over time. Customers can easily miss deadlines either intentionally or by chance.
Reasons could be any but it is your job to remind your customers of deadlines.
To get timely payments, it is always beneficial to remind your customers at least 3 days before the due date. Better, write the process on the back of invoice. You should ideally write, on the back of invoice following:
“In case you are not able to pay immediately, please inform us within 3 days”
Follow up with the client on due date however, be flexible.
Once your customer is sure that you are following up on payments, it is time to manage the excuses. Your invoice can be used to manage excuses even before they are raised by the customers.
Often customers attempt renegotiate the price and raise objections over issues such as disagreement with the contents of the invoice or even the work delivered by you. It is a common assumption that if customer does not raise any issues once the work is delivered, businesses consider it completed work. Contrary to this, customers often raise serious observations while paying the invoice.
If invoice amount is large, you are sure to face disagreements and last ditch efforts to renegotiate the price.
You should write, on the back of your invoice, that in case of any dispute, customer can contact you within certain days. Explicitly mention it on your invoice and be open to discussion and offer discounts if you can. It is always better to keep the customer for future business instead of losing your customer for further 5% discount.
Using the language of your customer in your invoice can significantly increase your payment rates. You can create a connection with your customers by using right language so follow above steps and you may be surprised to know how quickly you are paid.