When is the best time to send an invoice to your clients?
- Always ask for pre-payment so that you can build trust and start work.
- Monday or Tuesday are 2 good days for invoicing
- Build systems for invoicing - because they reflect your brand and professionalism
Creating an invoice is an integral part of any line of work. It informs the client about the remuneration to be paid, for the goods and/or services received. Also, creating and keeping a record of such sales. With the help of a well-designed invoice, the client also will be better able to navigate through all sorts of different fees.
The process of payment becomes smooth sailing when an invoice is effectively and efficiently built. So now, what do we need to get on with such an invoice? A good invoicing system. Yes, It will facilitate a business with strong cash flow management, economic inventory management, and most prominently accounting systems.
However, If you have a hard time deciding when to issue an invoice, it could be really difficult to manage working capital. Since payment collection would be badly hampered. Now, at last, the genesis of a well-functioning invoicing system lies in one simple question: when is the best time to send an invoice to your clients?
Firstly, as every successful business guru has ever said, remember, customer satisfaction is the key to long-term success. Invoicing is no different. A clean and convenient invoicing system and payment method will increase your odds of receiving the payment early.
There is a thin timeline that needs to be walked upon carefully while sending an invoice. Since it ought not to be too soon nor it is too late. As, if it is too early, your client may suspect something is wrong with this sale as you are rushing a bit much. On the other hand, if it is too late, the invoice may be questioned or rejected. So, the bottom line is to send an invoice when the customer confirms such a purchase.
Some businesses have a periodic invoicing system for certain regular customers. Clients in these situations have an agreement with the businesses in which they pay according to the convenience of both parties.
Huge corporations, such as Netflix, for example, urge their consumers to renew their subscriptions annually or quarterly and pay the amount then. A similar model is also used by a few small companies, where they send invoices to their regular customers periodically, which are paid by the client at their convenience.
Using an online invoice generator like Refrens’s makes the process easier and smooth. Its quick and easy invoicing helps you create an invoice within 2 minutes. Its recurring invoices feature enables you to create recurring invoices & never miss your payments. It is perfect for billing weekly, monthly or yearly.
Prepayment: Invoicing before the completion of work
Invoicing before completion of the assigned work is referred to as requesting a deposit or a prepayment. If your work requires you to order a hefty chunk of materials to get the work started, invoicing before the completion of work is the way to go for you.
This method is typically used by construction companies, shipping companies, large contracts, and other businesses that require raw materials and equipment to get started. This invoice is also a good idea for new businesses as funds from deposits can boost the project.
Billing before work is complete gives you the peace of mind that your customers aren't retreating or moving in the other direction to the very end. This increases the probability of your customers seeing your complete work. Taste the sweet fruit of the income you are working on, motivating you to work harder and faster, and acting as an incentive.
However, invoicing before the completion of work is not always a suitable option. Due to any unconsidered factor, you will need to charge the client extra or the outline of the job will change. Billing the client then becomes a headache, so sometimes it’s just best to.
Final invoice: Invoicing after the completion of work
Invoicing after the completion of work is the most common mode of business, and the sum amount therein is what customers are supposed to expect as the final payment post-delivery of their work. It notifies the customer that their work is done and shows good faith between you and the client.
Invoicing after the completion of assigned work also assures clients that there will be one fixed invoice and not different invoices with different prices. Invoicing after completion of work can be done after 24-48 hours or by turning in the invoice with the work.
Delivering the Invoice along with the work
Clients are less likely to check for bills under a huge pile of work, so sending an invoice along with your work is only sometimes a good idea, especially if it’s your first time working with a particular client.
However, invoicing after completion of the work would require you to have a professional invoice with you at that time and also discuss the payment and mode of payment ahead of time. A downside to sending an invoice along with your work is that if the client needs some revisions or changes, it would make the client frustrated as they would think you invoiced them for an incomplete job. A simple way forward could be:
Review: within 24-48 hours after the delivery
Instead of invoicing on the spot, give your client a phone call or send them an email to ask them to review your work and obtain confirmation of their satisfaction with it. Invoicing your client then would reflect professionally on your work and increase the chances of them booking you again in the future.
However, this method of invoicing is not ideal if you have multiple jobs lined up, one after the other, as it becomes difficult to follow up on unpaid invoices by clients. This is also a bad idea for businesses that are starting, as they would have to use their personal funds to cover expenses, which does not guarantee a profit.
How late can I send an invoice to the customer?
There is no definite time limit for sending in a late invoice. However, when to invoice depends upon the type of verbal or written contract you have with your customer. Delaying the sending of an invoice is not a good idea. Sending it as soon as possible is a sensible decision. The sooner you invoice, the better it is for everyone.
There have been numerous surveys held by different companies, such as Dejan Jacimovic, Gravity Credit Control, and Cash Flow Blog Vistr who analysed 3,00,000 invoices as a part of a survey on finding the best day to send an invoice to your clients.
On average, Mondays or Tuesdays are ideal days to send invoices as they improve your chances of getting paid that week or even that itself.
Sending an invoice every 15 days or periodically is also a good strategy to increase your chances of getting paid sooner. The best time to send an invoice is in the morning when everyone is either at work or going to work while checking their mail and messages. The chances of them seeing and responding to your messages for invoices increase by a huge percentage.
Invoices more often than not mean payday is near. However, it is the most crucial part in the process of getting paid, and the timing of sending invoices should be at the top of your mind as it increases the chances of you getting paid as soon as possible if done right. The correct or incorrect time of invoicing depends upon your relationship with the client, your business model, and your cash flow.
Best practices of Invoicing for Freelancers
It's no secret that people are willing to pay a higher price for exceptional service. Revenue should be 4-8 per cent greater than the rest of the sector for companies with a strong customer experience focus.
The methods below will show you how to automate invoice production and have information flow seamlessly between projects and invoices, which will help you improve your invoicing and billing process:
1. Don't overcomplicate
At some point, we've probably all struggled to pay an invoice. Make sure you don't make the same mistake. Consider simplicity and make sure that your client has access to all of the facts at first glance.
Your clients will require an easy-to-understand invoice, ideally one that is brief, to comprehend the message straight away.
2. Invoice is also a branding tool
Maintain consistency with your overall branding and marketing efforts. It should appear to be part of your client's conversation. There are several excellent accounting solutions available to make this simple and in line with your company's needs.
3. Highlight the date and reference number of the invoice
The importance of the date and reference number cannot be overstated. It allows you to organize your invoices while also serving as a reference for you both internally (for example, between departments) and externally (when communicating with your client).
4. Address the person and/or the company
On the invoice, don't only write the company's name. When dealing with smaller clientele, using a person's name helps to maintain a more friendly tone. For larger clients, it serves as a communication channel with the financial department in the event of billing questions or important information.
5. Mention a clear description of each item on the invoice
It's a moment for you to explain what value you delivered to your client, and it's also a fantastic method to establish trust by being transparent in your billing. This is a very basic point, but it is still extremely important information.
6. Provide the total, due date, and terms of payment
The total amount owed, the due date, and the payment terms are three critical pieces of information to present on your invoice. This ensures that everyone is on the same page and that everything is understood by both parties.
7. Multiple payment options
On the invoice, each payment option should be simply visible and understandable. Include cash, online, and other options (such as credit card, debit card, and so on) for making a payment in a matter of seconds using a credit card or bank account. In the end, make it simple to pay.
8. Email the invoice
Email is one of the most reliable, direct, and quick communication techniques available. It allows you to submit invoices in seconds and save money on mailing expenses all at once.
It's a technique of letting you know that the client has received and read your email. This can assist you to figure out whether an email hasn't made it to the client's inbox, allowing you to take action more quickly.
9. Before the due date provide a friendly reminder
Likely, your invoice isn't the only one your client is dealing with. Before the deadline, send them a nice reminder. You may also provide your aid and help here by answering any queries the customer may have.
10. End with a 'Thank You' note
This is a wonderful gift after the cash has been received to nurture your relationship with your customer, finish this job, and advise or give a way to a future relationship. Offer your assistance and make them remember your company above others.
11. Option of last resort!
The best way to get some extra work is to get paid before and after work. To do this, be sure to request a prepayment of 25-30% of the total cost of the project. This should be enough to buy equipment and materials first. Then set the final payment to cover the completion of the project. Make sure that the payment terms for your project are included in the legally binding contract, whether or not you invoice them before or after work.
It is possible to get paid on time as a freelancer
There is no correct date or a fixed time to send an invoice. Choose the method that best suits your and your client’s needs and workflow. If you have multiple clients, you may use different methods with each of them. Hence, experiment and select the most optimum time to send an invoice to get them converted ASAP.