Get Your Invoicing Under Control

Invoicing can be hard to get under control, yet it’s critical to your business. You’re busy finding clients, working on projects, marketing… doing basically everything so it’s easy to feel pulled in every direction. The most boring things tend to fall through the cracks. For a lot of people, that’s accounting, bookkeeping, etc.

Invoicing may not be the glamorous part of your job as an entrepreneur, but it’s how you get your money. When you juggle so many things, the best way to handle it is to put systems in place to reduce the work and keep you organized with minimal effort.

I’ll share with you how I do my invoicing and you can take from it what you think will work for you.

How I Handle Invoicing

Accounting Software

I use Quickbooks (QB) to manage my books. It’s  professional accounting software that even CPA’s use. I rely on it for all my business finances.

What’s great is you can use QB to create estimates, convert those into invoices, and even email them out. QB tracks paid / unpaid invoices, letting you know who still owes you money! You can also log your billable hours and expenses against project jobs / clients.

I try to end every day with a quick 5-15 minutes to update billable hours/expenses in QB. As long as the hours are in QB, I know I’ll be paid for those hours. So, I make it a priority to log my billables daily. The longer you go before recording your hours, the more likely something can fall through the cracks. In addition, taking a few minutes each day means this doesn’t become a monumental task at the end of your billing cycle. It’s much easier to carve out 10 minutes than it is an hour or two to invoice.

Sending & Tracking Invoices

I send invoices out at the end of the month, which is a convenient time for my business needs. I bill retainer clients in advance and hourly/project-based clients after the work is complete. End of month is a good compromise so I can do everything all at once. You’ll have to determine what the best billing cycle is for you. The idea is to set a schedule that’s convenient and block out the time to do the work. You may think of this as a dreadful hour of bookkeeping, but I think of it as freedom. Freedom to ignore invoicing the rest of the month because I know at the end of the month, I’ve set aside the time to take care of it. With so many other things to worry about, it’s nice to be able to ignore at least this one thing… at least until month-end.

This does present a cash flow cycle where my income all comes at the end of the month. It just takes a little planning to make sure there’s cash flow to cover monthly expenses. It’s worth it to me. Simplifying my invoicing allows me to scale. Scaling solves the cash flow issue.

In fact, I do most of my accounting tasks at the end of the month. That’s why it’s worth it to block out an entire day. It doesn’t take nearly that long, but I rather not have meetings and calls distract me on my “accounting day”. I don’t hate managing my business finances but if you do, condensing your accounting to one day may take the sting out of it.

QB is great for tracking invoices as well. Payments from clients are logged in QB (if they pay online). Right away, you know who still owes you money and how much. I’m also a little old school. This sounds silly but, when I invoice, I also print out a paper copy.  I put all the new invoices in a red folder. Red = unpaid. Once I see the payments come in, I file them away in my client’s file. Mostly I do this because it’s faster to flip through my red folder than to launch QB and run the accounts receivables report. But I’ll be honest, sometimes I just like good ol’ fashion papers and files.

Following Up on Unpaid Invoices

It’s important to know who owes you money. More important is actually tracking those people down and getting your money. I’ll admit, sometimes I’ll just forgive an invoice because maybe it’s been so long ago and I already asked once or twice. That’s no way to run a business. All those forgiven invoices are money out of your pockets and likely for work you’ve already done. You work hard; you deserve to be paid. Granted, you will come across a client who won’t pay, but don’t let it be because you were too shy to ask.

You could use QB to resend the invoice as a reminder, but I like to follow up personally. If someone hasn’t paid, it’s usually not because they want to cheat you, but because they forgot. A simple email or phone call reminder is usually enough.

Another way I tackle slow or non-payment is to collect credit card authorization from my clients. The best solution is always to prevent the problem. I always offer the option of automatic payment to my clients. When those clients get their invoice, they also get a notice that their credit card will be charged automatically on the due date. This gives them time to review the charges and dispute them if they want. When the due date rolls around, I charge all the clients who’ve agreed to automatic payment. At the same time, I send friendly reminder emails to clients who haven’t paid yet. Again, killing two birds with one stone.

In Summary

Find a cadence that works for you and for your business. It’s important to understand the difference between what can wait and what needs your attention right away. Don’t let things that can wait randomize, overwhelm or stress you out. Instead, bundle all those tasks together and block out time to actually do it. When you know you’ve set aside time to take care of all those things AND you are in the habit of following that schedule, you can safely ignore those tasks until the time comes. Invoicing is never stressful for me because I know it has its time and place.

DISCLAIMER: The information and advice I offer on this site are 100% from my own experience, understanding and independent research. I encourage you to do your own research, form your own opinions and practice your own strategies and share what works with the community.