Checklist 1: Choosing the right invoicing software
Here are some of the key things to look out for when you’re choosing the right software.
Big picture considerations
Overall, is the invoicing software:
🗹 Straightforward and intuitive to use on a Mac, PC, tablet or phone?
🗹 Robust enough to handle sales tax calculations for your country or state?
🗹 Able to handle multiple currencies if you export, or may export in the future?
🗹 Part of a complete accounting package or able to sync seamlessly with your accounting software?
🗹 Able to offer easily understood charts and graphs that shows key business information?
On the invoice itself
Does the software:
🗹 Convert quotes to invoices easily, taking all the details across?
🗹 Make it simple to select a customer and pull in their name and address?
🗹 Let you select items you sell so the description and price are pulled into the invoice?
🗹 Let you create secure editable online invoices that customers link to?
🗹 Enable you to offer your customers online payment options?
🗹 Make it easy to produce invoices that are clear to read and look professional?
Clever stuff to save you work
Does the software:
🗹 Connect to your bank accounts, and match payments to invoices for you?
🗹 Let you set up automatic invoice reminders to prompt customers to pay?
🗹 Have a mobile app that makes it simple to send an invoice, look up customer details, record expenses, and check on payments?
🗹 Transfer trial period information to your accounts once you subscribe?
Checklist 2: Getting paid quickly so your cash flow stays healthy
Want to avoid late payments and keep your cash flow healthy? Here’s a list of handy tips and tricks.
🗹 Work on the principle of ‘no surprises’. Your customer should know what to expect from the start of the job.
🗹 Make your invoices accurate and descriptive so the customer knows exactly what they’re being asked to pay for. Don’t give them a reason to come back to you with queries – which will delay you getting paid.
Check their history
🗹 Check the customer’s previous payment history with you before you agree to take on more work.
🗹 Check the credit rating of new customers especially if it’s a big job.
Review the payment terms
🗹 Agree the payment terms with your customer (in writing) before supplying anything. It’s important to set expectations up front.
🗹 Customize your standard payment terms if necessary. If the customer has a poor credit score or they request a discount, you may want to shorten the payment term. For large jobs, you may want to invoice weekly or monthly rather than at the end of the job.
🗹 Give customers less time to pay. Many businesses now typically ask for payment within seven days.**Xero invoices issued in 2015
Eliminate avoidable delays
🗹 Find out who the customer accounts person is. Make personal contact by phoning to introduce yourself and checking the address for the invoice.
🗹 Once the work is done, send the invoice. Don’t wait till the end of the month.
🗹 In case the customer does have queries about the invoice, make it easy for them to get in touch with you by including the details of who they should contact on the invoice.
🗹 Make sure you know which invoices have been paid and which haven’t – and follow up the overdue ones quickly.
Invoicing situations to avoid
It’s easy to make mistakes and take missteps when your business is just getting started – or even once it’s been going for a while. Here are a few common problems to avoid.
Your invoice payment terms are unclear.
Make sure you’ve got written agreement (an email is good enough) before you begin.
You forget to send your customer an invoice.
Create and send the invoice as soon as the job is done.
You spend all day chasing late payments.
Set up automated invoice reminders in your software so customers are prompted to pay before the invoice is due – and at various points afterwards.
You’re too lenient about your payment terms.
Remind yourself this is a business exchange. Include a tight payment date in your initial agreement and on your invoice.
You don’t offer customers alternate payment options.
Offer different payment options and include clear instructions on your 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 provided content.
Guide to invoicing
Do your invoices go unpaid for ages? There are proven ways to change that. Check out these tips on the art of invoicing.
- What is an invoice?
What exactly is an invoice? What does it do and what are the core building blocks that make one? Let’s take a look.
- How to make an invoice that's taken seriously
You’ve done the work; now it’s payment time. Let’s walk through the process of making an invoice.
- How to send an invoice
How you send invoices can have a big impact on how quickly you’re paid. Let’s look at some of the basics.
- Accepting payments
The easier you make it for customers, the faster you’ll get paid. We’ll show you the options for accepting payments.
- Sending payment requests
Following up on late payments is a job nobody likes, but it’s critical to business health. Let’s look at how to do it.
- How to improve your invoicing process
Check out our tips for making the invoicing process simpler so it takes up less time and the money flows in sooner.
- Invoicing checklists
Whether choosing invoicing software, getting paid fast, or avoiding mistakes, these checklists will keep you on track.
- Tools and guides for your business
Running a business takes a lot of hard work. Xero’s got resources and solutions to help.
Download the guide to invoicing
Learn how to create and send invoices that get opened, understood, and paid. Fill out the form to receive our invoicing guide as a PDF.