Invoicing process: Steps to get paid faster and boost cash flow

Published Tuesday 4 November 2025

Table of contents

• What is an invoicing process?
• Why streamlining your invoicing process matters
• Common invoicing problems and how to solve them
• Build the perfect invoicing system
• FAQs on invoicing processes

Key takeaways

• Establish a consistent billing schedule by choosing the same day each week for invoicing and treating it as a non-negotiable appointment to prevent backlogs and improve cash flow predictability.

• Implement frequent invoicing (weekly or immediate after work completion) to improve cash flow by 25-30% compared to monthly billing and maintain steady payment cycles.

• Utilise invoice templates with pre-filled client details and automated calculations to reduce invoice creation time by up to 50% and standardise your billing format across all customers.

• Accept online payment options such as credit cards, bank transfers, or digital wallets to reduce payment times and allow customers to pay immediately when convenient rather than waiting to process traditional payments.

What is an invoicing process?

An invoicing process is the series of steps you take from creating a bill for a customer to getting paid. It includes creating the invoice, sending it, tracking payment, and following up if needed. With Australian businesses needing to process around 1.2 billion invoices each year, a good process is essential to ensure you get paid on time and keep your records straight, making your business finances easier to manage.

Why streamlining your invoicing process matters

A smooth invoicing process means healthier cash flow because money comes in faster. It also saves you valuable time on admin, so you can focus on running your business. Plus, sending clear and professional invoices helps build trust and maintain good relationships with your customers.

1. Set a billing schedule

Consistent billing schedules help you send invoices regularly, reduce payment delays, and improve cash flow predictability.

Why it works: Regular invoicing prevents backlogs and gets customers paying on a predictable timeline.

How to implement:

• Pick a specific day: Choose the same day each week for invoicing
• Block calendar time: Treat it as a non-negotiable appointment
• Consider outsourcing: If you're consistently too busy, hire a bookkeeper

2. Invoice more often, get paid more often

Frequent invoicing helps you get paid more often and keeps your cash flow steady, rather than waiting for monthly payments.

The frequency advantage: Weekly invoicing can improve cash flow by 25–30% compared to monthly billing.

Choose your frequency:

• Weekly billing: Best for service businesses with regular clients
• Immediate invoicing: Send bills as soon as work is completed for project-based work
• Bi-weekly: Good middle ground for businesses with mixed project types

3. Connect quotes and invoices

Get quotes signed off before you start work. Use the same descriptions from the quote in your invoice so your customer knows exactly what they are paying for. This helps you avoid misunderstandings or disputes.

4. Use invoice templates to their fullest potential

Invoice templates help you standardise your billing format and cut creation time by up to 50% with pre-filled information and automated calculations.

Template optimisation:

• Customer-specific templates: Save templates with pre-filled client details and standard services
• Automated calculations: Build in formulas for totals, taxes, and discounts
• Job-type templates: Create different templates for various service types

When to upgrade: As your business grows beyond 20-30 invoices per month, dedicated invoicing software becomes more efficient than spreadsheet templates.

You can use this invoice template to get started.

5. What could an invoice maker do for you?

You can speed up your invoicing process with specialist software by:

• learning the price of your products and services
• calculating taxes and automatically preparing paperwork for filing
• doing daily bank reconciliation to tell you which invoices have (and haven't) been paid
• working from your phone, so you can send invoices from anywhere

You can learn more in our guide on billing software.

6. Track time and materials better

Accurate time and expense tracking helps you bill for all your work and reduces invoice preparation time from hours to minutes.

The tracking problem: Businesses lose an average of 10–15% of billable time through poor tracking and forgotten expenses.

Tracking solutions:

• Time-tracking apps: Clock in/out from your phone to capture exact billable hours
• Expense apps: Photograph receipts and assign them to specific jobs instantly
• Single source systems: Use integrated tools that connect time tracking to invoicing

Result: Complete job information available instantly when creating invoices.

7. Should you accept online payments?

Online payment options reduce payment times, and the move toward digital systems like e-invoicing is estimated to provide benefits to the Australian economy of $28 billion over ten years by eliminating friction.

Why online payments work: Customers can pay immediately when convenient, rather than waiting to write and mail cheques.

Payment method options:

• Credit/debit cards: Instant processing, 2-3% transaction fees
• Bank transfers: Lower fees (0.5-1%), slightly slower processing
• Digital wallets: PayPal, Apple Pay for consumer-friendly transactions

When to implement: If customers regularly pay late or you want to improve cash flow consistency.

Find out how online payment services get you paid faster.

8. Train your customers to pay on time

When you bill a new customer, call to check the invoice has everything they need. This helps set clear expectations for payment. If they miss the due date, call the next day to check in. Stay friendly and let them know you keep track of payments. Repeat this for the first few invoices to build good habits.

9. Chase invoices like you really want them

Invoice follow-up is a key part of the process. Even perfect invoices usually need 1–2 payment reminders before customers pay on time.

The follow-up reality: Only 30–40% of invoices are paid by the original due date without reminders.

Follow-up sequence:

• Day of due date: Send friendly payment reminder
• 3-5 days overdue: Second reminder with payment urgency
• 7-10 days overdue: Phone call to discuss payment timeline
• 15+ days overdue: Formal collection process

Learn more about how to handle unpaid invoices.

Common invoicing problems and how to solve them

You may face some common invoicing issues. Here’s how to handle them:

• Manual data entry errors: Mistakes happen, but they can cause payment delays. Using invoicing software helps automate details and reduce errors, which is significant given the ATO found a 90 per cent correlation between SMEs using accounting software and having their tax calculated correctly and paid on time.
• Customer disputes: A customer might question a charge. Avoid this by making sure your quotes match your invoices and that all work is clearly itemised.
• Late payments: Late payments move A$7 billion in working capital from small to large businesses each year. Set clear payment terms from the start and use software to send automatic reminders.

Build the perfect invoicing system

A smart invoicing system helps you send bills faster and get paid sooner. Use these nine steps to review your invoicing process regularly and stay on top of your finances.

Learn more about how you can work smarter with Xero's intuitive invoicing software.

With the new Tap to Pay feature in the Xero Accounting App, you can accept all types of contactless payments directly from your mobile phone. Your customers can tap their credit card, debit card, or digital wallet for a fast, convenient payment. Powered by Stripe, this feature makes it easy to accept invoice payments and keep your cash flow moving.

FAQs on invoicing processes

Find answers to common questions about invoicing processes below.

What's the difference between billing and invoicing?

Billing means asking your customers for payment. An invoice is the document you send to show the details of the transaction. Invoicing is a key part of billing.

How long should my invoicing process take?

With the right tools, you can create and send an invoice in just a few minutes. This helps you get paid sooner and spend more time on your business.

What should I do if a customer disputes an invoice?

Contact your customer to understand the issue. Review the original quote and the work completed. If you made an error, send a corrected invoice. Clear, friendly communication helps you resolve disputes.

How can I automate my invoicing process with Xero?

With Xero, you can create and send professional invoices from your phone or computer. Set up recurring invoices for regular clients, send automatic payment reminders, and see when your customer has opened the invoice.

Disclaimer

Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business or before taking action in relation to any of the content provided.