How digital invoicing encourages prompt payments

 In Small Businesses & Startups

Making sure your invoices get paid on time is an integral part of keeping your freelance enterprise or small business in the black.

Receiving invoice payments beyond the agreed deadline can have negative consequences for your business, including:

  • Time and money invested in reminder communications and debt collection
  • Difficulty planning for future business cash flow accurately
  • Inability to reinvest the payment in business development exercises

But, by utilising advanced accountancy software providers such as Xero, and their digital invoicing procedure, there’s plenty you can do to maximise the chances that your invoices will be settled in a timely fashion.

Digital invoicing: automation

Possibly the biggest advantage of accountancy software is invoice automation. With this feature, recurring invoices can be set up for regular clients, to save you time on preparing bespoke documents every month. Customisable payment reminders and ‘thank you’ emails can also be sent out automatically, enabling you to chase up late payments with very little effort.

Rather than making you wait for a cheque in the post, an automated invoice gives clients the opportunity to pay directly with a single click (Xero), or using trusted payment gateways such as PayPal, GoCardless and Stripe. This payment will be automatically transferred to your account and logged in your cash flow record, enabling you to see what payments have been paid, are due or owed at a glance.

Advanced accountancy software also enables you to send out invoices from anywhere in the world, which means you won’t need to wait until you’re back in the office before instigating the payment process.

Digital invoicing: branding

By using advanced accountancy software to create a branded invoice using an expertly designed template, or creating your own using CSS, you can leave a lasting impression on clients that will help persuade them to pay up on time.

A sleek, well-composed invoice gives off an air of professionalism that’s not possible with other methods, such as Word or Excel documents. This helps indicate to clients that you take your business, and prompt invoice payments, seriously. This should make them think twice before coming up with a threadbare excuse for late payment.

Invoice accuracy

Compiling an accurate invoice enables you to overcome payment delays that may occur while the details of the invoice are being confirmed with the client. With regular, automated invoices, clients will come to know exactly what to expect from you. You can also see when a client has reviewed the invoice, helping to overcome the ‘misplaced communication’ excuse.

Collecting invoice-related information can save you time further down the line. The formats provided through accountancy software is HMRC compliant, as all the information required for your Self-Assessment tax return will already be collated and stored in the relevant place.

If you want to reduce the amount of time and effort you invest in invoicing, and increase the chances that clients will pay up on time, then advanced accountancy software can give you the tools that you need.

Find out how to get started with a fully automated invoice system by getting in touch with the friendly 3 Wise Bears team.

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