Invoicing for Service Companies: A Better Invoice Process for Better cash flow
Sending invoices should be a fun part of the job for any service business owner. You’ve completed a job and now it’s time to get paid for your hard work. Unfortunately, for many businesses, invoicing is a pain. You’re dealing with paperwork, possible duplicate entry, and you’ll inevitably have clients that don’t pay on time.
How can you avoid the headaches of invoicing and make sure you’re getting paid quickly for your work?
What is an Invoice
Let’s start with the basics. An invoice is a bill sent to your customers after you complete a job or service visit. The invoice establishes what services you or your company provided, how much is due and when, and how your customer can pay.
A professional invoice speaks to your company’s credibility and may play a role in you landing repeat business with a client. When issuing an invoice for your client, make sure to include information that they expect, and information that helps your company look professional:
- Obvious, but important: include the word ‘Invoice’ near the top of your invoice
- Date the invoice was issued and the date payment is due (make the due date as clear as possible, avoiding confusing terms like ‘Net 30’)
- Invoices should be numbered for easy referral for your client and for your own records
- Individual line items for work completed so the customer can see exactly what you did
- Date of service
- Total amount owed
- Payment instructions included either on the invoice, or in the email when you send the invoice
- Say thank you: old school, but professional, warm, and always appreciated
When Should you send Invoices
Once you’ve established a consistent and professional look for your invoices, you need to establish when to send your invoices. When you choose to send your invoices will depend on the type of business you run, the type of work you do, and the frequency of client visits.
Send an invoice after each job
It will often make the most sense for you to invoice immediately after the completion of a service visit. The sooner you send an invoice, the sooner you will get paid, and this is good for cash flow.
The trade off to invoicing after each visit is more paperwork. For this reason, invoicing immediately after each visit makes sense when you’re completing a job for a client less than once a month. If you have multiple jobs or visits for a client each month, it’s often best to set up a process so you’re only sending your invoices once a month.
Invoice monthly for a flat rate
It’s best to reserve this billing method for large maintenance contracts only, so that the higher rate allows you to ensure a profit no matter the maintenance requirements that month. Spending the time crunching the numbers to determine a rate that’s both fair to your customer, but takes into account the potential for a busy month for your team is important when setting monthly flat rates.
The upside of invoicing for flat monthly fees is less paperwork and admin time, but a potential problem to be aware of is that clients may start asking for additional services that are outside of your original agreement. This is why it’s very important to itemize what services are covered in your contract. It’s one thing to take on an extra task as a favour, but if a particular task arises repeatedly, you can talk to your customer about modifying your contract to include the service.
Invoice monthly per visit
If you have a solid list of recurring clients with multiple visits a month, this is the best way to send out invoices. Compiling the charge for all of your visits into one invoice requires much less paperwork than invoicing after each visit. It’s also easier for both you and your customers to ensure one invoice is paid, rather than sifting through multiple invoices each month.
Bonus Techniques to Boost your cash flow
Professional invoices and good communication with your clients will help your cash flow. But there will still be times when you have a slow paying client, or may run into cash flow troubles. Let’s dive into a couple bonus techniques you can use to keep your cash flow positive.
1. Make it easy for your clients to pay
Your clients do want to pay you, but you might be making it difficult for your clients to pay. Make their lives easy and implement steps so it’s not work for them to pay you.
A great way to do this is by accepting payments online. People can buy clothes, order their groceries, and pay their cell phone bills online. Can they pay your service business invoices online as well? When you accept payments online, you can email your client an invoice, and with a few clicks, your client can easily pay.
An added bonus to epayments? They are great for customer service.
Finance your invoices before they are paid
FundThrough’s online funding service offers business owners a simple way to advance payments for their outstanding invoices. Fundthrough looks at the outstanding invoices in your invoice software (including Jobber) and will be able to fund your invoices right away.
Send professional invoices, organize your process, and find additional ways to boost your cash flow. You’ll spend less time doing paperwork and more time getting the job done. Your clients and your cash flow will thank you.
Author: Barret Hall
Barret’s an experienced digital marketer who’s helped a number of small businesses grow their online presence. He works on the Jobber Marketing Team and writes about marketing, customer service, and technology at Jobber Academy