Client Invoicing: How to Get Paid on Time, Every Time
- Invoicing clients internationally can be a major problem for small businesses because of the amount of information they need to provide.
- Sending invoices manually and dealing with unresponsive clients takes a lot of time away from more important tasks.
- Client invoicing software makes it easier for all parties to pay invoices, track payments, and stay compliant with invoicing standards.
If you run a small business, are a freelancer, or run an agency, every single invoice matters—so it’s only natural if you feel that client invoicing (and the entire invoicing process) gives you the jitters. Even worse if it’s past the due date, and you haven’t received any news from your customers. Getting paid faster becomes not just a shapeless fear running in the back of your head; it becomes the very engine of survival as a service provider.
Why, more exactly, are there so many ways to bill your client—and what can you do once you send the invoice to make sure you get paid on time?
In this article, we’ll take a deep dive into client invoicing, learning how to use invoice software to create and send invoices, as well as how to make sure clients pay (on time).
Why do you and your clients need invoices?
Invoices are a necessity in accounting in order to register sales or outstanding payments. They list services to be rendered or products to be delivered. In most cases, invoices also list payment terms, and serve as a paper trail for past transactions.
For most companies, invoicing is a rather difficult topic. Luckily, there is software that takes care of this task. Before we look at invoicing programs, let‘s first find out what kind of requirements exist to issue a proper invoice.
Invoice requirements: how to create a professional invoice template
Billing is not just a matter of sending invoices and getting paid. Obviously, that’s the main goal behind it—but when you’re a service provider, your invoices belong to your brand. They are part of the message you put out in the world; you want them to look professional and properly formatted, and you want your invoice to meet all legal requirements too.
One of the first hurdles you’ll encounter is that invoicing laws differ from country to country. Some countries require a VAT or business number, while others don’t. There are even countries that need you to keep paper invoices on file. Others will accept digital invoices and even PayPal invoices as legal documents. Since you and your clients might be legal entities in different countries, it’s important to make sure you are aware of both the invoicing legislation on your end and on theirs.
Your invoice should include
- Your business contact information
- Your clients’ business information
- Invoice date and number
- A list of each product or service you’ve sold
- The total amount due
- Payment terms
Although this is not a legal requirement, adding your branding (logo, colors, etc.) can make an invoice look more professional; it might even position you as more authoritative, knowledgeable, and trustworthy when it comes to the service you provide.
Last, but definitely not least, make sure your invoice format looks prim and proper. You don’t want any typos or grammatical errors—and you want the entire document to look sleek. A great way of achieving this is by using an invoice template. You have a few of options you can use to do that:
You can create your invoice template in a Google Sheets or Excel file (and then download it as a PDF, so you can send email invoices)
You can create your invoice template in a Google Doc or Microsoft Word/Apple Pages document (and download it as a PDF); keep in mind that, in this case, the document will not do the math for you, so you will have to do it manually
Use accounting software (which, as you will see, comes with a series of advantages)
The challenges & solutions of invoicing clients locally and internationally
Sending invoices is not always a piece of cake. On one hand, you want customers to pay what they agreed to (and do it on time.) On the other hand, you understand these business owners you work with are your partners, and you want to foster good relationships with them.
You’re definitely not alone in this conundrum. In fact, according to studies run by the UK Government in 2021, businesses in Britain have collected a staggering £23.4 billion worth of late invoices. And that’s just the United Kingdom.
A hundred small issues can show up from the moment the invoice is paid. Let’s look at some of the more common problems.
Not enough information on the invoice
You might come across the issue that a new client needs extra information about your business (such as a VAT number, even if you’re not a VAT-eligible entity in your own country). In this situation, it’s important to be prompt about addressing the client’s needs and sending a new, updated invoice.
Issues often arise when there is a mismatch between your expectations. For example, you might think the project is done and dusted when, in reality, your client feels they’ve only received half of what they needed—and thus, might delay the payment. This is why having a clear contract is crucial for you and for your clients.
You might have a local client who likes to do business in cash. While this is not illegal, it does make it harder for you to keep track of how many invoices per month you’re actually billing, and how many of them are getting paid. According to client management best practices, you should make your payment terms clear from the very beginning to avoid any back and forth and get paid quickly.
In some cases, a client simply might not have the money to pay you on time. It happens, especially to small businesses and startups that are still in the process of building a client base. They often don’t have cash flow reserves to cover unexpected financial bumps in the road.
Good to know: If you use SPP, the software sends unpaid invoices reminders automatically.
International bank transfers
It might sound borderline made-up, but international bank issues can still arise—even in 2023 when we’re all more interconnected than ever before. The lack of international transfer systems set up on both your end and that of your clients can lead to a series of problems such as delayed payments or currency exchange rate issues.
If you’re invoicing a client in another country, chances are the language will be different from your own. Unless someone on your team is fluent in your clients’ language, this might lead to a series of misunderstandings. The most viable solution here would be to either use a translation service to have the invoice translated into your client’s language, or to use client invoicing software that will do this automatically for you.
Grow your industry knowledge
Tip: In SPP, you can add multiple languages and translations to ensure that your clients have access to invoices in their language.
Are there any legal implications for not paying invoices?
Businesses can certainly take legal action for non-payment if their invoices are delayed.
When both parties are located within the same legal jurisdiction, things are pretty straightforward. If you have sent your reminder and the client is still unresponsive, a debt collection agency or attorney can resolve the issues in your name However, when a global context is involved, the situation gets a bit more complicated as there might be different legal systems at play.
If you have signed a contract with your clients (and you should’ve), you can take legal action against your debtor. Keep in mind, though, that lawsuits might not be financially worth it, depending on the outstanding amount.
The best way to invoice clients: problems and solutions
Beyond the local/international context, there are a few more factors that can play a role in the way you invoice your clients and get paid. Here are some of the more frequent problems including solutions to keep in mind.
The client is unresponsive
If you have sent a reminder and the client is still unresponsive, you can take legal action. Depending on your contract and the legislation covering both your business entity’s jurisdiction and your client’s, there might be a minimum amount of time you need to wait before taking such action.
The best way to avoid this problem is to have a clear contract in place and work with legit, trustworthy clients. Ask for (partial) payments upfront if the customer is a brand new one to be on the safe side.
You forget to send your invoices on time
As silly as it may sound, it happens that you forget to send an invoice. Things can get hectic if you have to send ten invoices every month to five clients each on a different date, following a different billing format. On top of it, every invoice needs to be issued according to a different contract. Let’s not forget you need to actually deliver services on top of all this.
The easiest solution to this issue is to automate client payment reminder emails. Most invoicing software options have a billing function that makes monthly or yearly recurring invoicing (including email reminders) a breeze. Features like these save time, energy, and money in the long run.
You don’t know how to send an invoice
If you’re just starting out, chances are you’ve never had to send an invoice. An accountant or bookkeeper can help you with this. If you need to move fast and send an invoice quickly, you should know there are a lot of legit free invoice templates available such as these ones. One thing to keep in mind about these is that they need to be up-to-date with the latest requirements—so double-check before you hit send.
Client invoicing software explained
In a nutshell, invoicing software allows you to focus on your freelance business or agency without having to worry about micromanaging your own clients. However, choosing software that has the right invoices features can be a baffling experience.
What is client invoicing software?
Invoicing software is a tool that helps businesses streamline their billing and invoicing process. It automates the creation, management, and delivery of invoices, so businesses can concentrate on their core activities.
It is worth mentioning that not all invoicing software is considered accounting software. In the same vein, not all invoicing tools are client management software too. If you need advanced accounting features or a Customer Relationship Management tool, you might want to look beyond simple invoicing tools.
The benefits of client invoicing software
Using software to create, send, and manage your invoices can be a complete game changer, from multiple points of view:
It helps you encourage clients to pay
It helps you invoice as soon as projects are done
It sends invoices directly to your customers
It includes payment gateways that help you get paid faster
It helps you automate invoice creation and sending
It helps you track invoices
It helps you include everything you need to in terms of legal requirements
It allows you to focus on the work and worry less about the technicalities
The best invoicing software for small businesses
Nobody can tell you which is the best invoicing software out there, as this is something you need to decide based on your specific needs. Some of the most popular ones offer many features allowing for an easier way to manage invoices and estimates, as well as get paid online.
QuickBooks is one of the most well-known billing software options out there. The company offers a cloud-based solution that gives small businesses the ability to track their finances, create and send invoices, and process payments.
Square Invoices offers a user-friendly invoicing solution for small businesses. The software is designed to help businesses save time on billing and invoicing, and they also have a free (albeit limited) pricing plan too.
Zoho Invoice is one of the most widespread invoicing software programs. Like most of the Zoho products, this one doesn’t look or feel like a modern tool, and has a lot of limitations. It does, however, do the job: it allows you to create an invoice and track it accordingly.
If you are looking for accounting software for small businesses, you’re in luck. The SPP client portal software includes an all-in-one invoicing set of features and allows you to send unlimited invoices on every pricing plan. Regardless of whether you’re an agency, freelancer, or any other service provider, Service Provider Pro is one of the best invoice apps, as it will allow you to stay on top of all your bills, ensuring you always get paid on time.
Best way to invoice customers
Good, functional, and affordable billing tools are the best way to invoice customers. They ensure that you bill clients correctly, on time, and remove unnecessary manual work that goes into manual invoicing.
While client invoicing may still be flawed in many ways, modern technology helps SMEs and freelancers like you to get paid on time, and in full. Automating your invoicing process with software is the best way to go about it—whether you’re a one-person operation or have a team of 20 people.
Give this a thought and get the invoicing app that suits your needs.