7 Common Invoicing Mistakes and How to Avoid Them

Is sending invoices a significant part of your business? If so, then you’re likely all too familiar with the fact that 39% of all invoices in the US are paid past the due date. It’s already hard enough to get paid on time, but making common invoicing mistakes can lead to even later payments.

If you’re not careful, this can lead to serious cash flow issues. So, how can you make sure that your invoices are good to go?

Read through this list of the most common mistakes companies make when invoicing for clients so you can avoid making them yourself.

1. Waiting to Send Your Invoice

It’s easy to get caught so caught up in the work you’re doing for your clients that you end up forgetting to send your invoice. All too often, you don’t realize that you forgot to send it until weeks later when you realize you haven’t been paid in a while.

You can avoid this completely by making sure to send your invoices promptly. After all, it’s highly unlikely that your customer will reach out to you asking for you to send it. And, the sooner you send your invoice, the faster you’ll get paid, so it literally pays to be prompt.

If you have trouble remembering to send out invoices on time, look into invoice scheduling options to help you automate the process.

2. Sending Your Invoice to the Wrong Person

If you’ve noticed that a customer isn’t paying your invoices on time, it could be that you’re sending the invoice to the wrong recipient. Maybe your original contact no longer works at the company, or there’s a new person responsible for handling invoices.

If your clients are paying invoices late, it doesn’t hurt to check in to make sure you’re sending them to the right recipient.

3. Not Setting Due Dates for Payments

Take a moment to look at your current invoices. Do you have vague payment terms listed on the template? For example, are you using language like:

• “As soon as possible”
• “Net 30”
• “Within x days of project completion”

If so, there could be some confusion around when your clients actually need to pay you. Instead of leaving it open to interpretation, take out all the guesswork for your clients by listing a specific due date on the invoice. For example, if you send an invoice on January 1 and you want the payment within a week, make sure the language on the invoice states that the payment is due by January 8.

This will make it much easier to set expectations for your clients to meet.

4. Not Providing Descriptions of Items on the Invoice

Just like you’re probably sending out invoices to many different clients, your clients are probably responsible for paying several different invoices. If you don’t include any item descriptions on your invoices, your clients may not remember what services you provided.

In the worst case, they may start to question the invoice, or even refuse to pay. You can help eliminate all of that confusion by listing out itemized descriptions of each item for which you’re requesting payment. This will give your clients more clarity and show that you’re transparent in your business practices.

Let’s say, for example, that you own an auto repair shop. Your clients want to choose a mechanic they can trust and not feel like they’re being ripped off. By listing out each item and corresponding price on your invoice, you can set your auto repair shop apart from the competition.

5. Not Including Payment Terms and Conditions

In an ideal world, you can trust that every single client will pay you on time with no issues. Unfortunately, that’s not always the reality. In some cases, clients may try to get away with “scope creep” by trying to get more services for the same fee. In other cases, they may try to pay less than the amount on your invoice or pay very late.

If you don’t include terms and conditions on your invoices, then you don’t have anything to back up your policies in the event of those circumstances. Instead, include clear language on every invoice that outlines late fees, deadlines, revision policies, etc. This will help protect your business’s best interests in the event of an issue with a client.

6. Not Following Up

When you’re waiting for a customer to pay an invoice, it can become awkward when too much time passes. Is the client unhappy with your services? Did they not receive your invoice? While it can be uncomfortable, the best thing you can do is follow up with them.

Most of the time, your customer is simply as busy as you are and they’ve overlooked the invoice. In fact, in a lot of cases, you’ll receive your payment the same day you follow up, so it never hurts to check-in. If you want to make it even easier, look for an invoicing system that provides automatic follow-ups, so you don’t have anything extra to do yourself.

7. Not Including a Payment Method

Finally, don’t forget to include a payment method on your invoice. There’s nothing worse for your customers than to receive your invoice and have no idea how to actually pay it. If you prefer payments by check, include that information on your invoice, including where to make out the check, so there’s no confusion.

If you prefer credit card or PayPal payments, include that information as well. As a result, you’ll likely collect payments much faster.

Avoid These Common Invoicing Mistakes

Now that you’ve read more about the most common invoicing mistakes that businesses make, you know what not to do. Now, it’s time to collect your money and make invoicing easier for your clients and yourself!

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