As a contractor, getting paid on time is crucial for your business. But it’s easy to make mistakes in the billing process, especially if you don’t have professional contractor invoicing specialists on your team.
Understandably, it’s tough to establish a streamlined invoicing process when you work with multiple clients, each with their own unique requests. However, by simply recognizing the following invoicing mistakes, you’ll be more proactive in your billing approach, which can help save time and money.
When drafting invoices, you want to come across as professional, organized, accurate and consistent. Therefore, all invoices should have a standard format. Otherwise, you risk confusing customers and making it tough to analyze invoices if you ever have to return to them in the future.
Invoices are often at risk of becoming inconsistent when contractors deal with varying complicated tasks or if multiple personnel are approaching the invoicing process differently. Establishing a template can help address this issue. Additionally, before sending out invoices, be sure to review them carefully for things like typos and incorrect figures.
Life on the job site gets busy, but do your best to avoid late invoice submittals. Billing may sometimes seem like an arduous task, but it needs to be done in order to get paid.
If you don’t follow up on pending invoices, it can hurt your business. Of course, your customers can get busy just like you, so sometimes they just need a friendly reminder from you. Be sure to have a follow-up procedure in place so you can maintain a healthy cash flow.
Sometimes invoices feature erroneous information. Again, whether a figure is off, the invoice reflects a wrong percentage of work completed or something similar, it’s important to review the invoice thoroughly before sending it out.
Unfamiliarity with terms and conditions
To avoid discrepancies, it’s important to fully understand and bill within the parameters of any terms and conditions established up front between you and the customer. This involves setting clear payment timelines.
Unawareness of client billing processes
It can sometimes be helpful to understand the billing and scheduling process of each client. They might utilize a specific payment method or make payments at different times than you’re used to.
Missing details and confusing itemization
Leaving out certain information can complicate invoices and make it harder for customers to pay you. Invoices should include the following information:
- Invoice number
- Invoice date
- Customer’s address
- Your address
- Logical and consistent itemization of services
- Due date
- Payment methods
- Terms and conditions
Note that itemizing too much or too little is one of the most common invoicing mistakes contractors make. It’s important to provide just enough information for your customers to know what they’re paying for. It’s also important to avoid unexplained fees.
Avoid billing mistakes with professional contractor invoicing
In order to maintain cash flow and credibility for your business, be sure to avoid the mistakes mentioned above. By doing so, you’ll be more likely to get repeat business and referrals while also saving time and money.