Scaling up your invoicing process as your company expands can be a significant challenge, but ensuring it's streamlined is the first step.
Invoicing can be a headache when you have a handful to do once a month, but when you have many more going out at multiple dates throughout the month, it can quickly turn into a nightmare
It's important that your invoicing process is able to scale up with you as your business grows. This ensures that you keep a steady flow of revenue coming into the organization as you undergo your expansion, while also helping to maintain the positive relationships you have with your clients by delivering a consistent service
But with so many factors that make it difficult to accurately predict how your business will expand, and what this will mean for your current and potential clients, how can you prepare your invoicing process
The best way to be prepared for any significant changes in your company is to make your current process as streamlined as possible. This makes it much easier to scale up - or down - to best complement your business.
Here are five simple ways you can prepare to invoice at scale:
1. Automation is your friend
Introducing automation software is perhaps the best and most effective way you can simplify your invoicing process. It allows for greater transparency between finance professionals and directors as it enables electronic document exchange and automatically creates a "paper trail", giving much more visibility into each stage of the invoice process. Automation software allows many elements of the process to be done automatically and then recorded. By doing both of these, automation software reduces errors and delays in invoices, which can be extremely costly to businesses.
It's important that you find automation software that suits your organization and is capable of being flexible alongside your growth goals. Once you have this in place, it makes it much easier for you to go from sending out five invoices to 15 and even 300 a month.
2. Improve workflow efficiency
In order to have your invoice process scale up effectively, you need to make sure that your workflow model is as effective as possible. Is the way the finance department communicates with directors working well? Does it get the message across in the most timely but appropriate manner? How do the key notes of this then get delivered to the rest of the company?
Understanding how your own internal processes can be streamlined or improved to make them more effective is a crucial element of scaling up businesses. Finance is a very specialist area of a business and extremely important, so it's essential that the way you are working complements the end goals of the company.
3. Remove duplicate entries
Duplicate entry of invoices can be a severe problem, which will only be exacerbated as your company or invoicing needs grow. It wastes the time of finance professionals by demanding that they go through and check the data entry, while also inconveniencing clients or suppliers who may experience late invoices or payments.
Using software like QuickBooks or other software that highlights and removes any duplicate entries can help you to streamline your invoicing process and make the best use of financial professionals' time. It allows you to bulk upload invoices from most accounting platforms and also allows you to set parameters for documents, helping to weed out any errors.
Implementing software makes it less likely that you'll duplicate payment of invoices too, as it can keep a record to give you more clarity over incoming invoices from suppliers.
4. Itemized invoices
Vague invoices that don't break down all items in the invoice can be a nightmare for finance departments, and the clients that receive them. Not itemizing your invoice makes it more likely that people will feel they are being wrongly charged, wasting the time of your finance team who have to chase down the answer and potentially harming the company's relationship with the client.
Allowing your customer to see each item that has been charged for will make payment much more streamlined, and brings more transparency to your invoicing process. This is key if you want to scale up your invoicing procedure and send out an increased number of documents. Having customers query their invoices can waste valuable time on just two or three invoices a month, but if there are ten or more that are disputed, finance professionals will have little time for anything else.
A detailed invoice should have specific sections that mention the product or service rendered, the quantity, and any notable differences from regular delivery. In this way, itemized invoicing makes it easy for you - and your client - to keep track of what products/services are in high demand, giving you more insight into customer tastes and preferences.
5. Be clear on late payments
Automation software allows you to be notified when payments have not been made within a certain window, enabling you to chase clients. You need to be clear about how long you are prepared to wait for invoices to be paid and what the process for chasing this money is. Often companies enforce certain fees for late payments but there needs to be a stage after this to escalate this 'bad debt'.
This procedure should all be clearly laid on in the contractual terms you deliver to each client when they first use your service. Not only does this protect you from a legal standpoint, but it tells clients where they stand and what is expected of them when they receive an invoice.
Understanding this process, and it being clear between you and the directors, and what the role of the finance team in this is, will help to streamline your accounting. It's also important that it's clear what you have the autonomy and authority to do, and what you need the approval of directors for.
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