Since setting up this firm in 2014, I’ve found a lot of smaller businesses have a very British attitude to invoicing, we raise our invoices on day X each month.
The problem is that day X might have a tight deadline job come in, or a family crisis or a kids show one month. What do you think small business owners put first, is it the tight deadline job come in, or a family crisis or a kids show or the invoicing?
Yes you’re right, it is generally everything except the invoicing. So why do you wait until a certain day to raise your invoices?
What is wrong with “Invoice on the day you complete the job or on the day you agree to do the work.”
Why do I say that? The longer you delay in sending out the invoice, the longer a customer feels they can take to pay. Their thought process is “he couldn’t be bothered charging me for 4 weeks, so I can’t be bothered to pay him for 4 weeks”.
Done daily this is very manageable and means the impression you create with your customers is “Wow, not only are their products/service fabulous, they even sent the invoice promptly, they must be on the ball, I had better pay promptly”.
I recently gave a talk at BizMums in Winsford, Cheshire, we were discussing how to make the most out of your invoice and I raised this point. One of the attendees said she worked to a set date to raise an invoice and quite often something of a higher priority did come up so her invoices were late.
We discussed her raising the one off job invoices at the time the job is completed, she realised it made sense and that her cash flow would be improved and that the impact of a single event on a set day wouldn’t be as catastrophic to her business.
When do you invoice and why?