12 November 2024

My Handy Guide for Small Businesses: How to Send Invoices and Get Paid

By Ronald Smith

Hey there, fellow small business owner! Today, I want to talk to you about something that’s really important for our success: invoicing and getting paid. I know it may seem a bit confusing at first, but don’t worry, I’ve got your back. Let’s dive right in!

What is an Invoice?

First things first, let’s define what an invoice is. An invoice is a document that you send to your customers, stating how much they owe you for the goods or services you provided. It’s like a bill, but for businesses.

When you create an invoice, make sure to include all the necessary details. Things like your business name and contact information, your customer’s name and address, a description of what you provided, the date, and of course, the amount they owe you.

Why is Invoicing Important?

You might be wondering why invoicing is such a big deal. Well, let me tell you! Invoicing is essential because it helps you keep track of who owes you money and when their payments are due. It also gives your customers a clear record of what they need to pay, making it easier for them to pay you promptly.

Not only does invoicing help you stay organized, but it also helps you maintain a good cash flow for your business. By sending out invoices regularly and following up on any late payments, you can ensure that you get paid on time, keeping your finances healthy and your stress levels low.

How to Create and Send an Invoice

Now, let’s get down to business and talk about how to create and send an invoice.

First, you’ll need to decide on the format of your invoice. You can create a simple invoice using a word processing program like Microsoft Word or Google Docs, or you can use specialized invoicing software. Choose a format that works best for you.

Next, gather all the necessary information, such as your business details, customer information, and the details of the products or services you provided. Double-check everything to make sure it’s accurate.

Once you have all the information ready, it’s time to put it together. Start by adding your business name and contact information at the top of the invoice. Then, include your customer’s name and address, followed by a clear description of what you provided.

Make sure to include the date of the invoice and the payment due date. You may also want to mention any late payment fees or penalties if applicable.

Lastly, calculate the total amount your customer owes you and clearly display it on the invoice. You can break down the costs if necessary, showing the price per item or any taxes or discounts applied.

Once your invoice is ready, it’s time to send it to your customer. You can do this by email, regular mail, or even through specialized invoicing software. Just make sure to keep a copy for your records.

Following Up on Late Payments

Now, what if your customer doesn’t pay on time? Don’t worry; it happens to the best of us. The important thing is to follow up on those late payments.

Send a friendly reminder to your customer a few days after the payment due date. Politely ask them to make the payment as soon as possible and provide them with the necessary details, such as your bank account information or instructions on how to pay online.

If your customer still hasn’t paid after the reminder, you may need to send a more assertive message. Let them know that late payments can affect your business and that you may need to take further action if the payment isn’t made soon. Be firm but professional.

If all else fails, you may need to seek legal assistance or involve a collections agency to recover the money owed to you. Hopefully, it won’t come to that, but it’s good to know your options just in case.

In Conclusion

There you have it, my friend – a handy guide for small businesses on invoicing and getting paid. Remember, invoicing doesn’t have to be complicated. With a little organization and some clear communication, you’ll be well on your way to getting paid on time and keeping your business thriving.

Now go out there and conquer those invoices! You’ve got this!

My Handy Guide for Small Businesses: How to Send Invoices and Get Paid

One of the scariest times for small business owners like me is when I don’t have enough money because my customers aren’t paying on time. It’s not because my business isn’t doing well, but because my customers are taking too long to pay me.

In this guide about sending invoices and getting paid, I want to share some tips on how to send invoices to your customers in the best way. I also want to give you some advice on how to make sure you get paid on time (or at least close to it), so you don’t have to worry about not having enough money.

Use Invoicing Software

Using invoicing software, like Hiveage, has a lot of benefits for my business. First, it shows my customers that I have a professional and organized way of doing my accounting. Second, they will know that they can’t avoid paying me by slipping through the cracks.

My Handy Guide for Small Businesses: How to Send Invoices and Get Paid

On your end, you’ll be able to easily keep track of special promotions offered to specific customers, how quickly or slowly customers tend to pay, which invoices are past due, and much more.

You’ll also be able to run detailed reports that will help you when customers are interested in their invoicing versus payment history. You can also run these reports when customers protest the amount of products or services they’ve received in relation to the amounts they’ve been invoiced.

Let’s Discuss Invoicing Details at the Start

First, know what information you need to provide to customers.

Next, find out how the customer wants to be invoiced.

Finally, figure out who needs to receive the invoice (and who needs to be copied).

Every customer has their own unique set of rules when it comes to sending invoices. It can be a little confusing at times, but it’s important to understand and follow their specific process.

For some customers, invoices need to be approved by the company owner first and then sent to the accounting department. Others require the invoice to be sent to accounting with a copy (CC) to the project manager you are working with, so they can give their approval as well.

Once in a while, you may encounter a customer who has a more complicated process. In this case, the invoice may need to be sent as a PDF to one person for approval, then forwarded to another person for further approval, and finally, it needs to be electronically submitted to an outside accounting department.

To avoid any confusion or delays, it is crucial to find out the specific process that your customer follows for invoicing. Make sure you understand and adhere to their requirements.

Clearly State Your Payment Terms

You know, it’s surprising how some folks out there don’t specify their payment terms. They just leave it as the default option on the invoice. But hey, if your payment terms aren’t due right when you receive the invoice, then you should make a change. Otherwise, people might think you just left it as is and make up their own rules for payment.

Speaking of payment terms, here’s a neat trick to ensure you get paid before you even start working or send out the product. How about offering a discount for advance payment? Your customers will be thrilled at the chance to save a little money, and you’ll be relieved knowing you won’t have to worry about someone not paying up.

Let’s Make Invoicing Expectations Crystal Clear

I want to make sure you know when to expect your invoice from me, so I’ll give you a heads up on when I usually send them out. It could be at the end of the month, the beginning of the month, halfway through the month, every week, every two weeks, or when I finish a project. That way, you’ll know when to keep an eye out for it.

Give Multiple Payment Options

Just because most of my customers pay through PayPal or online doesn’t mean everyone does. I want to make it easy for you to pay, so I offer different ways to pay, like credit card or check. This way, you don’t have any obstacles in making your payment.

To ensure that you can pay the way you prefer, I’ll include my mailing address on the invoice and provide additional online payment options outside of PayPal.

My Handy Guide for Small Businesses: How to Send Invoices and Get Paid

  • When you use Braintree, they won’t charge any fees for processing the first 50k of transactions. However, they do charge an extra 1% for transactions in international currency.
  • Both Braintree and Stripe have a chargeback fee of $15.
  • Stripe also charges an additional 2% for transactions in international currency.
  • If you choose Authorize, they will charge you a $49 setup fee, a $25 monthly gateway fee, a 1.5% assessment fee for international transactions, and a $25 chargeback fee.
  • Are you interested in accepting payments over the phone or in person using your mobile device?
  • Do you only want to accept standard credit card payments like Visa, Mastercard, Discover, AMEX, or are you also open to newer payment methods such as Apple Pay, Bitcoin, or Venmo?
  • Do you need the ability to offer subscription billing or split payment options?
  • Are your customers worldwide or in countries that cannot use PayPal?

Once you know the answers to these questions, you can compare the features of different payment processors to find the right one for your business.

Also, keep in mind that if you have customers who refuse to use PayPal, they might not like Braintree either. This is because PayPal has acquired Braintree.

Make Sure Your Invoice was Sent

You trust your invoicing software, but it’s always good to get a reminder that your invoice has been sent.

Once you’ve sent an invoice to a customer for the first time, make sure to send an email to both the intended recipient and anyone who should be aware of it. Just let them know that you’ve sent out the invoice. It can be a casual mention along with your project updates.

Usually, you only need to do this for first-time customers or those who often pay late. For first-time customers, it ensures that all the invoicing details are correct.

Send Polite Reminders

Not everyone pays on time. Some people may genuinely forget about your invoice because they’re busy with other things. So, in the beginning, it’s best to assume that they’ve just overlooked your invoice and frame your reminders accordingly.

My Handy Guide for Small Businesses: How to Send Invoices and Get Paid

  • I noticed you haven’t had a chance to check out my invoice yet. In case it didn’t come through properly, I’m sending it again. I’ll also send a PDF version in a separate email, just to be safe. You never know how email spam filters can be these days.
  • I know you’ve been super busy with the new project launch lately. Just in case my invoice got lost in the shuffle, I wanted to make sure you saw it for last month’s work.
  • Hope you had a great trip! I know you must have a lot to catch up on, so I wanted to bring this to the top of your list since it’s been 30 days since I sent the invoice.
  • This is just a friendly reminder about my invoice from last month. Time really flies, but since it’s been 30 days, I thought I’d give you a heads up.

If you don’t have time for personalized reminders, no worries. You can opt for automatic reminders instead!

Take a Stand

  • Do you want this company to keep being your customer? If so, showing empathy towards their late payment might earn you their loyalty in the future.
  • Can you stop providing deliveries or services because of non-payment? Again, this decision may depend on whether you want this company to continue being your customer.

With these answers in mind, take appropriate action. Start by sending your invoice again, both digitally and through the mail. Give your customer a call and let them know that you understand that times may be tough, but you have fulfilled the agreed-upon services or sent the promised products. Therefore, the payment is now due immediately.

Yeah, I get it. This situation might feel uncomfortable, but it’s just part of doing business. The truth is, you’re probably not the only vendor who’s waiting for payment from this customer. So, if you’re the only one who’s persistent about it, chances are you’ll be the first to get paid. Well, maybe not before essential stuff like utilities and rent, but you’ll be up there on the list.

I know it can be frustrating for both you and your customer to keep pushing for payment. But trust me, it’s important if you want to get paid. Some small business owners have even shared stories of waiting for payment for up to two whole years after a bill was due. I mean, being late is never a good thing, but it’s still better than never getting paid at all.