9 key steps to streamline you small business invoicing process

Published Monday 27 October 2025

Table of contents

• What is the invoicing process?
• Why automating your invoicing process saves time and money
• 1. Set a billing schedule
• 2. Invoice more often, get paid more often
• 3. Connect quotes and invoices
• 4. Use invoice templates to their fullest potential
• 5. What could an invoice maker do for you?
• 6. Track time and materials better
• 7. Should you accept online payments?
• 8. Train your customers to pay on time
• 9. Chase invoices like you really want them
• Streamline your invoicing process with Xero
• Frequently asked questions about invoicing processes

Key takeaways

• Establish a consistent billing schedule by picking a specific day and time each week to handle invoicing, which ensures steady cash flow and prevents invoice backlogs that can delay payments.

• Invoice more frequently rather than waiting for monthly cycles, as weekly billing or immediate invoicing after work completion accelerates cash flow and encourages customers to pay on time.

• Connect your quotes directly to invoices by using the same descriptions from signed quotes in your final invoices, which reduces payment disputes and speeds up payment by showing customers they're getting exactly what they agreed to.

• Implement systematic follow-up procedures by calling customers the day after missed due dates and maintaining professional, persistent communication until payment is received to improve collection rates.

What is the invoicing process?

The invoicing process is the series of steps your business takes to create, send, and track invoices for products or services. A good process ensures you bill customers accurately and get paid on time. It starts when you complete a job. The process ends when you receive payment and record it in your books.

Why automating your invoicing process saves time and money

Manually creating and tracking invoices takes time away from running your business. Automation handles repetitive tasks like sending reminders and recording payments. This reduces errors and frees you up for more important work. When you get paid faster and spend less time on admin, you improve your cash flow and can focus on growth.

1. Set a billing schedule

Consistent billing schedules ensure steady cash flow and prevent invoice backlogs. Pick a specific day and time each week to handle invoicing, then stick to it.

Prioritizing billing ensures you get paid for your work. If you’re often busy, you might want to hire a bookkeeper to manage invoicing for you.

2. Invoice more often, get paid more often

Frequent invoicing accelerates cash flow by reducing the time between work completion and payment requests. Billing more frequently helps you avoid delays and encourages customers to pay on time.

Optimize your billing frequency with these approaches:

• Weekly billing: Prevents backlogs and maintains steady cash flow
• Immediate invoicing: Send invoices as soon as work is completed for odd jobs
• Consistent timing: Gets customers on a predictable payment schedule sooner

When you invoice more often, you turn unpredictable cash flow into steady, predictable income.

3. Connect quotes and invoices

Quote-to-invoice alignment reduces payment disputes by clearly connecting delivered work to original agreements. Get quotes approved before starting any project.

Use the same descriptions from your signed quote in your final invoice. This helps your customers see they’re getting exactly what they agreed to, which reduces disputes and speeds up payment.

4. Use invoice templates to their fullest potential

Invoice templates streamline billing by automating repetitive tasks and reducing errors. Maximize their effectiveness with these strategies:

• Pre-filled templates: Save customer-specific templates with standard information
• Built-in calculations: Use formulas to automatically total charges and calculate taxes
• Job-specific versions: Create templates for different service types

As your business grows, you may want to use dedicated invoicing software for advanced automation.

5. What could an invoice maker do for you?

Invoicing software automates your time-consuming tasks and gives you real-time visibility of payments. Here are some key benefits:

• remembers your product and service prices
• calculates taxes and prepares paperwork
• tracks payments and shows which invoices are paid or outstanding
• lets you send invoices from your smartphone

6. Track time and materials better

Accurate time and expense tracking eliminates the slow process of piecing together project costs from multiple sources. Keep all your time and expense tracking in one place.

Signs your tracking needs improvement:

• Opening diaries, emails, and receipt folders to calculate project costs
• Spending more time on invoice preparation than the actual work
• Missing billable hours or expenses due to poor organization

Digital tracking solutions solve these problems:

• Time-keeping apps: Clock in and out of jobs directly from your phone
• Expense apps:Photograph receipts and attach them to specific projects instantly

This creates a single source of truth for each project, making invoicing faster and more accurate.

7. Should you accept online payments?

Online payment options can help you get paid up to 30% faster by making it easier for your customers to pay you. When you offer more ways to pay, your customers are more likely to pay right away.

Popular payment methods:

• Credit and debit cards: Instant processing for immediate payment
• ACH transfers: Direct bank transfers through services like PayPal
• Bank transfers: Traditional but reliable electronic payments

Setup is usually free, but providers charge transaction fees. If you want to encourage faster payments, offering convenient payment options can help.

8. Train your customers to pay on time

When you set clear payment expectations, you help your customers pay on time. Proactive communication helps you avoid most payment issues.

First invoice process:

• Call new customers to confirm the invoice has everything needed
• Remove potential excuses for late payment through direct communication
• Signal that you monitor payments closely

Follow-up protocol:

• Call the day after any missed due date
• Keep the tone professional, not aggressive
• Frame calls as checking if anything's wrong, not demanding payment

Use this approach for your first few invoices to help your customers develop reliable payment habits.

9. Chase invoices like you really want them

Following up on invoices is a key part of your invoicing process. When you follow up systematically, you improve your collection rates.

Essential follow-up steps:

• Due date reminders: Contact customers when payment deadlines arrive
• Phone follow-up: Call if written reminders don't work
• Persistent but professional: Maintain consistent communication until payment

While following up may not be your favorite task, it’s essential for healthy cash flow.

Streamline your invoicing process with Xero

When you optimize your invoicing system, you speed up your cash flow and reduce your admin workload. These nine steps give you a framework for improvement, and the right software makes it easy to put them into action.

Xero automates your entire invoicing workflow:

• Integrated invoicing:Create and send professional invoices in minutes
• Automated reminders: Set up payment reminders to reduce follow-up work
• Real-time tracking: See which invoices are paid, pending, or overdue
• Mobile payments: Accept contactless payments directly through the Xero Accounting App with Tap to Pay

With Tap to Pay, powered by Stripe, your customers can pay instantly by tapping their card or digital wallet on your phone. This helps you avoid payment delays and keeps your cash flow moving.

Ready to transform your invoicing process? Get one month free and see how automation can save you time and help you get paid faster.

FAQs on invoicing processes

Here are some common questions most small business owners have about the invoicing process.

What is an example of invoice processing?

Imagine a graphic designer completes a logo for a client. The designer creates an invoice listing the service, agreed price, and payment due date. They send it to the client, who then pays it. The designer’s accounting software automatically marks the invoice as paid. That completes the process.

What legally must be on an invoice?

Requirements can vary, but a standard invoice should include your business name and address, the customer’s name and address, a unique invoice number, the date, a clear description of the goods or services, and the total amount due. It’s also a good idea to include payment terms.

How long should the invoicing process take?

With manual methods, it can take hours to create and send invoices. You may also spend more time following up. Using invoicing software can cut this down to minutes. The goal is to make the process as quick and efficient as possible to maintain healthy cash flow.

What's the difference between invoicing and billing?

Invoicing means sending a specific document—an invoice—for a one-time transaction. Billing is a broader term. It can include sending invoices, statements, or payment requests, often on a recurring schedule for ongoing services.

Should I use invoice processing software or stick with templates?

Templates are a good starting point, but they require manual data entry and tracking. As your business grows, invoice processing software saves you time and reduces errors. It also gives you a clearer view of your finances by automating tasks like sending reminders and reconciling payments.