HomeBusinessHow To Manage Your Company’s Invoices Optimally

How To Manage Your Company’s Invoices Optimally

Invoice Processing Almost every business deals with invoices in some way. You may submit them to your clients for payment or receive them from vendors that you work with, or both.

Either way, managing invoices smartly is an important part of running a business smoothly. It helps prevent errors and streamline payments.

In this article, we’ll go over eight ways to better manage your invoices—both on the accounts receivable side and the accounts payable side. Here they are:

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  • Use invoice templates

Before you spend a lot of time drafting an invoice from scratch (or worse yet, doing this for every invoice), find a good invoice template online. Many are free to use.

Besides, not every job is the same. So having a template is an efficient way to have a base invoice that you can modify based on the project.

In addition, some clients may have special template requirements. Determine what invoice design works for them before submitting your work.

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This will save you time and stress in the long run.

  • Offer flexible payment options

Offer clients flexible payment options to help ensure you get paid as quickly as possible. The more options you give clients, the better.

Some examples of potential payment options include credit cards, ACH bank transfers, and PayPal. Avoid cash and check since these take longer to process.

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  • Automate the invoicing process

Whether you’re issuing or collecting an invoice, you want to automate the process as much as possible. This is to save time and help make sure no invoices fall through the cracks.

An easy way to do this is to invest in an automated invoice management system. It will help streamline invoice submissions and approvals so that you and your clients get paid faster.

  • Create a checklist of what every invoice must include

Checklist Standardize what goes on an invoice with a checklist. For example, you might require vendors to include the following information on their invoices:

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  • Customer name
  • Invoice number
  • Date
  • Payment terms (e.g. bank transfer, check, or PayPal) with due date
  • Name of product or service performed with relevant details
  • Any relevant tax details

Make sure to agree on these in advance. That way, you will be less likely to run into delays or disputes later on.

  • Integrate your invoice management solution with accounting tools

Having different software solutions for invoicing and accounting can be a hassle. It means you have to transfer data from one to the other manually.

Instead, integrate your invoice management software with your accounting tools so that information is shared between them automatically.

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This strengthens your billing process and makes invoice data more accessible for advanced reporting and analytics. 

  • Set up regular payment days 

Instead of submitting and collecting invoices on random days, set regular days for these events, such as every Friday, for example.

This helps you keep a rhythm for your accounts receivable and accounts payable and gives vendors a better idea of when to expect your invoices and when to pay you.

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  • Avoid common invoice delays

Nobody likes to get paid late. So it’s important to avoid common invoice delays like sending an invoice to the wrong person, setting unclear payment terms, and sending invoices on inconvenient days such as weekends or public holidays.

Try to make it as easy as possible for your clients to pay you. Also, aim to set clear expectations with your vendors so they do the same for you.

  • Conduct regular audits

Audit Lastly, conduct regular audits of your accounts receivable and accounts payable. Review each step of the invoicing process to make sure it was performed correctly. Pay attention to any unhealthy cash flow patterns.

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Are there any inaccuracies or delays? If there are, fix the issues as soon as possible.

Continue to monitor your invoice management regularly so that you minimize costly mistakes and delays.

Adding it all up

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Invoices shouldn’t take up a lot of your business’s time. If you implement the tips above, you can streamline your invoice management so that you rarely have to worry about them. You can just let them be processed in the background while your business continues to make money.