Business owners know how the invoice process can be fraught with pitfalls that lead to delayed payment, or worse, no payment. Yet invoice mishaps can have bigger implications on the business than you might think.
The average cost of resolving a paper invoice dispute is £12, the typical cost of processing an average invoice £6.60. When 10-40% of all paper invoices issued come into dispute this adds up to a lot of wasted time and expense in finalising them – not to mention the delayed payments. This is time and money that businesses don’t have spare.
Forget hounding people to pay their invoices on time – the mere act of creating and submitting an invoice can lead to drama. Most small business owners know how the invoice process can be fraught with pitfalls that lead to delayed payment, or worse, no payment.
But steering clear of a few simple mistakes can keep everything on time – here are seven blunders to avoid:
- No backup system. It’s kind of a no-brainer, but if one computer crashes, all your records are gone. Make sure to back your invoices up on multiple computers – or better yet, store it in the cloud. These are some of the most important documents of your business, after all.
- Having one gatekeeper. Don’t give full ownership of this responsibility to just one person – you never know when you’ll need access to the information, and gatekeepers can cause bottlenecks – the last thing you want when you’re trying to get paid.
- “The invoice is in the mail…” Unless you’re hand-delivering paper invoices, you can’t confirm receipt unless you’ve paid for FedEx. And snail mail means snail payment…the worst kind. Go online to get paid faster. Our infographic clearly shows just how much paper invoicing costs businesses (and the environment) every year.
- Forgetting to invoice altogether. Admit it – it happens. And that’s money lost. Make sure you have a system in place to help you remember to send out your invoices along with any reminders when they are overdue.
- Incorrect currency conversions. Working with international businesses? A miscalculated currency conversion causes delays at best, and underpayment at worst. Make sure you’re using a system that allows for the most updated conversion rates.
- Misfiring an invoice. Ever sent the wrong invoice to the wrong vendor? That can get hairy when you’re sharing confidential pricing matters – and might even hurt negotiations if one vendor sees how much (or little) you’re paying others. Automate your system to avoid the awkward.
- Doubling up. Generating duplicate invoice numbers is one of the most common mistakes made. Without a system to prevent dupes, small business owners risk wasting time and money trying to undo the confusion this can create.
In short – invoice mishaps can have bigger implications on your business than you think. Be sure to put systems in place to prevent snafus that cause delays in compensation – the more efficient your invoicing practices, the faster you get paid.