Sunday, March 06, 2011

Why You Should Invoice Your Customers on Time

Our neighborhood has a lawn service company that mows yards for a reduced price - so almost every home in the neighborhood uses them. We just received our bill from them for the first time in 6 months! Instead of billing monthly they sent us a bill for September, October, November, December, January and February. Needless to say, what seems like a great monthly price is pretty stout when it's billed in 6 month increments. (The long story is that they have consistently billed late like this for the last 3 years).

This brings up the importance of invoicing your customers. To jazz up your sales invoice your customers on time. Here's why:

  • When I receive a late invoice it makes me feel like the company is overcharging me. It makes me feel like they don't need the money. After all, how can a company make payroll each month if they aren't receiving payments from customers?

  • Late invoices are confusing. Now I'm confused because I can't remember when the lawn care company trimmed the weeds back in September. Invoicing on time will avoid confusion and payment disputes from customers that will take extra energy to figure out.

  • Invoicing on time will get you paid on time. For a small business cash flow is the key to life. A late invoice can mean your customer no longer has the money set aside to pay you. A late invoice may cause your customer to not remember exactly what they are paying you for. A late invoice tells your customer you didn't need the money at the time services are rendered so paying on time isn't that important.

2 comments:

Hermes Group Intl. said...

Great article - I've definitely recognized the importance of timely invoicing for my business!

You should follow my blog as well;

Hermes Intl - A Small Business Blog
Integrated Marketing Solutions Website

variable data printing said...

Great advice. I'll go one step further - consider charging your customers before you do the work. We started doing this for our direct mail and variable data printing business, especially for the customers who had a hard time paying on time, and works very well for both parties.