How you design and deliver your customer invoices directly affects if and when you’ll be paid. Don’t put this process on auto-pilot. Take a close look at your customer billing system and put the same time and effort into it as you do into delivering your products and services.
Stop using “Due on Receipt” terms. Most businesses do not pay bills upon receipt. So using this as your payment terms really provides no due date at all, and you’ve now let the customer decide when to pay you.
Stop using “Net 30” terms if you want the customer’s payment in your bank account in 30 days. Most customers put a check in the mail on or around the 30-day mark when they see these terms. Sometimes the bookkeeper waits 30 days to print the check. Then the check has to be signed and processed for mailing. Using “Net 30” terms will usually get you paid in 40 days.
Instead of using “Net xxx days” terms, tell the customer the actual due date on the invoice. If your invoice date is 8/31/16, and you want the customer check in your bank account within 30 days, make the due date 9/20/16.
Remove all punitive language from your invoice and replace it with positive phrases. Read Why Charging Customers Late Fees Does Not Work
Instead of saying, “All past due accounts are subject to a 2% late fee,” say this instead, “We value your business and our relationship. We look forward to receiving your payment on time.”
If you are an individual or LLC and provide services, also include a completed W9 with your invoice. Many companies won’t pay unless they have a W9 on file, and getting this form from you delays payment. You can get the W9 form here.
Make sure your invoice provides all details of the services performed or items purchased. As an outsourced accounts payable clerk, I have sent back many invoices to vendors asking them to reissue the invoice with this information.
Make sure your invoice includes the following information:
- Your Accounts Receivable Department phone number and email
- Account Manager’s name, phone number and email
- Remittance address
- Date of invoice
- Unique invoice number
- Due date
- Total amount due
Follow your customer’s invoicing requirements such as including a PO number or attaching the approved estimate or quote.
Find out how your customer prefers to receive their invoice (mail, fax, email) and where the invoice should be sent, including to whose attention.
If you send your invoice through QuickBooks email or Freshbooks email, confirm that the customer received your invoice the first few times you use this method. Often, these emails end up in customers’ email spam or promotions folders.
List all the ways you accept payment on your invoice and provide as much info as possible on how to use these methods.
Consider printing invoices on the same bright, colored paper each time or using a large colorful logo so your invoices stand out and are pleasant to the eye.
Include a customer message that uses unique language to thank the customer for their business. Try to not use the tired phrase of “Thank you for your business.” Here are some ideas
- Thank you for trusting us with your bookkeeping. We value our relationship and hope to serve you for many years ahead.
- Thank you for trusting us with your lawn care. Please let us know if there’s anything we can do to help make your lawn the best in the neighborhood!
- Thank you for trusting ABC Veterinary Clinic with the care of your best friend. We are always here for you and your pet.
If your customer paid their last invoice on time, include a unique thank you message on their next invoice.
- Thank you for your last payment of $187.25. We appreciate you following through on this commitment and hope we can continue to serve your lawn care needs.
- We deeply appreciate your business and the timely manner in which you pay your bill each month.
- We appreciate your prompt payment and look forward to continued business with you in the future.
Design and present your customer invoices in such a way that not only nurtures your relationship with your customer, but makes it easy for them to pay you on time.