Besides just being the thing that gets you paid, invoicing has benefits that the savviest small business owners are wise to take advantage of.
Without the clout of a big business name, you have to stand out wherever you can. When done right, your invoicing practices can help you do just that, speaking volumes about the qualities you want to show as a business.
All too often, invoicing is treated as another annoying administrative task that no one wants to bother with. But, invoicing offers you more paths for success than just getting paid on-time! With Independent Retailer Month winding down, there’s no better time than the present for indie businesses to think about ways to gain momentum all year long. And you can do that by using the power of a well-thought invoice.
From using your invoice as a marketing tool to building meaningful relationships with customers, here are five reasons why proper invoicing is crucial to the success of your small business or startup.
- Invoicing helps maintain steady cash flow.
- Invoicing forges meaningful relationships with clients.
- Invoicing is a branding opportunity.
- Invoicing encourages repeat business.
- Invoicing establishes your professionalism.
1. Invoicing helps maintain steady cash flow.
Invoicing is what keeps the income coming in. And your company’s financial health is measured by that steady flow of cash – steady being the operative word here. Unless you have a boatload of capital just lying around, it’s nearly impossible to keep a small business afloat without a steady stream of income. It’s simple: the more effective your invoicing process, the quicker you’ll get paid.
To increase your chances of prompt payment, don’t delay sending out your invoices. It’s easy to push off, but invoicing should be a routine procedure. People generally want to pay for the things they receive – your customer mentally parts with their cash before they actually complete their purchase.
Shorten the period between purchase and payment as much as you can. The longer the transactional process, the less eager the customer will be to pay.
2. Invoicing forges meaningful relationships with clients.
You can show your customer that you care about them and value their business with your invoice. Seizing this opportunity ensures customer loyalty.
Stand out, don’t be generic. You don’t have to build each invoice from scratch – have a format that allows some personalization for each client. If you’re unsure where to start, use free invoicing templates that are relevant to your industry.
Your invoice should show your brand’s humanity and reflect your sense of authenticity. Address your point person by name and reference past communications. Your invoice is part of your formal business communications, but there’s no reason it can’t result in a legitimate connection.
3. Invoicing is a branding opportunity.
And a free one, at that! An invoice that gets paid without a second glance is good, but an invoice that catches the eye and makes the customer remember why they began doing business with you in the first place is much better. So design it carefully.
A carefully crafted invoice is the easiest way to show your company in its best light. You have full control over it, so be deliberate with every choice you make. Small details can make a big difference. Think twice about each design element, as well as the message they send. (Think about logo placement, colors, branding, and any personal notes you want to include on your invoice to lend a human, on-brand touch.)
4. Invoicing encourages repeat business.
An invoice commands attention, and we all know the value of attention. Don’t squander it by neglecting to let customers know of upcoming promotions or sales you’re running. It’ll keep your company top-of-mind, while providing a financial incentive to continue doing business with you.
Your invoice is going to be seen, so make sure it’s remembered. An easy way to do this is to have your invoice double as a coupon.
First-time and repeat customers alike should receive promotional offers embedded into each invoice. Imparting value on the customer’s end is the most effective way to soften the bill at hand while encouraging ongoing business.
This might go without saying, but make sure the offers are actually good. Your most vocal advocates, repeat customers are a huge value to a small business.
5. Invoicing establishes your professionalism.
It’s important to give the impression that when clients work with you, they don’t have to worry about anything. Especially if you’re a small operation, you have to let them know that you know what you’re doing. Professional, authoritative invoicing can really hammer that home.
A sure-fire way to gain professional trust and respect is through clear, honest communication. Your invoice is a great place to set clear expectations – from there, you just have to deliver.
Moreover, an invoice is more than a receipt – it’s a comprehensive summary of your agreement. That includes not only the balance due, but also the details and terms of the transaction. You want to lay it all out to leave no room for misunderstanding. A confused client is an unhappy client.
Of course, you don’t want to go too far with professional sentiment. The cold touch (or worse, feigned hominess) of big business is never well-received. Shoot straight, but temper your authority with a warm touch.
Plain and simple, invoicing matters.
Your invoicing process concludes each transaction you make. If you do it wrong, you run the risk of letting it conclude the whole relationship with what could be a great, long-term client.
So keep your cash flow steady, your brand on-point, and your customers happy, connected, and coming back with solid invoicing practices.
Did I miss anything? Share your best invoicing advice in the comments below!
For more small business tips, be sure to read:
Kay Dexter is Sage’s Small Business Product Marketing Strategist and entrepreneur advocate for Sage in Atlanta. Sage is the global market leader for technology that helps businesses of all sizes manage everything from money to people – whether they’re a start-up, scale-up or enterprise. Sage frees business builders from the burden of admin, so they can spend more time doing what they love.