Time and tide wait for none, or so the old saying goes. Late invoicing is an attributing factor creating a hindrance to the business and an uninterrupted workflow. An invoice is machinery used in getting paid for the work completed, the absence of which could hamper the income of the business.
It portrays the company in an unprofessional manner and questions the integrity of the work done. It also creates the crisis of late payments which altogether hurts the financial status of the business. There are ways to overcome such situations, some of which are listed below.
- It is crucial to understand the fact that most customers will never chase for the invoice. It is your responsibility to send it in due time and avoid complications at a later stage. Sending out invoices late could also frustrate and agitate the customers as the delay can uphold current payments depending on the financial status of the company. The delay could lead to the compilation of small payments which in turn creates a problem for the sum to be paid in bulk.
- Late invoicing eliminates the factor of interest on late payments as it does not fall under the customer’s responsibility for the delayed statement. This brings a disruption in the payment records and also no compensation can be demanded from the client. However, due to the customer’s error, for instance, when they fail to produce a purchase order which makes you unable to issue an invoice, a late payment interest can be charged under the circumstances.
- Another factor resulting in late invoices can be the reason for snail mail like physical cheques and drafts. This takes up a large amount of time for the invoice to be received and the cheques to get printed. Some banks print cheques once in a month and if you miss that deadline, your invoice would be stuck, leading you to wait for weeks to get the payment processed. Cheques could also get misplaced in the mail adding another burden to your cash flow. It is advised to opt for digitized online payments as they are faster and negates the problems mentioned above leading to seamless services.
- Sending out smaller invoices instead or larger ones can help standardize faster cash flow as it is processed more rapidly. Customers with recurring orders can result in situations amounting to bulk charges and a hefty sum in the invoice. It would be smarter if you could bill these customers quickly, leading to smaller and more prompt invoices.
This ultimately makes it easier for the customers to pay sooner than delaying the process. Sometimes, invoices would need authorization and multiple approvals from the company heads or maybe they might be absent for some given reason. The more delay you cause in sending out invoices, the more hindrance it causes for the said payment. Smaller invoices are easier to handle than the larger ones.
Human error is one of the key factors in late invoicing. It is natural to make mistakes but one must learn to overcome and maintain a professional stance. Using new software tools and services can help with the efficiency of invoicing.