Knowing what to prioritize when managing a business can be complex for young entrepreneurs and SMEs. With so many responsibilities to manage, certain tasks may be set aside.
However, one of the most important responsibilities for business managers is billing. Effective invoice management is the basis for a company’s successful development.
Learn more about the importance of good invoice management and see our tips on how to do it.
The importance of good corporate invoice management
Billing is an essential process in business management. It forms the basis for the company’s development.
First, good invoice management is necessary for corporate accounting. You need to know exactly where your money comes from and where it goes to be able to manage your cash flow properly. You can quickly detect anomalies in your turnover with proper invoice management.
Effective invoice management is just as important for business taxation. The law states that you are obliged to keep your business records and invoices for a certain period of time. Tax authorities may ask to see your invoices as part of audits. It is therefore important to keep them for legal purposes.
Advice for effective invoice management
Wondering where to start to optimize your corporate invoice management? Here are a few tips to help you improve your practices.
Organize your invoices efficiently
Organizing your billing efficiently is the first step towards good invoice management. Setting a clear methodology will give you a better overview of your invoicing.
For example, you can start by developing the rules and terms and conditions to follow for your invoices. This not only puts certain processes in place, but also protects you legally.
Another tip for organizing your invoices is to number them. This simple system helps you keep your invoices in order and quickly identify those that remain unpaid.
Make your payment terms clear from the outset
When you do business with a new customer, you need to make your payment terms very clear from the start. Not every company has the same billing rules, and the customer should be notified if you have any special terms.
For example, you may charge a fee if a payment is made after the due date. In this case, it is important that you notify your customer, otherwise they may complain that they did not know about it.
Automate your billing processes
Another way to make your invoice management easier is by automating your processes. There are several accounting tools and software that help companies automatically produce their invoices without errors.
These tools also save businesses a lot of time. In addition to automatically producing invoices, they can send payment reminders and automatically record payments made in your files.
Act professionally with your clients
Having a professional attitude is obviously very important in your customer relations. From your first contact with them, your professional and courteous attitude will make them understand your management skills.
This must continue throughout the relationship with your customer, especially when it comes to invoicing. If a payment is late, you can be insistent, but your communications must remain polite. For example, remember to use polite forms in your payment reminders.
Professionalism is the best way to maintain good relations with your customers, even if they are “deadbeat" payers.
Always claim your payments and follow up with clients
Once you send an invoice, always keep track of it. This way, you can make sure you receive your payments on time and, if not, you can send your customers reminders.
If you have customers who often put off collecting an invoice, send them reminders regularly. Your payment terms are there to guarantee your success. It is important to respect them.
Once again, certain management tools can be very helpful to properly follow up and manage your invoices. Investing in a good customer relations software could be an option to consider if you have trouble keeping track of your communications.
Invoice management: a priority for SMEs
In short, effective invoice management should be a priority for any company, especially for SMEs and start-up companies. Invoice management is essential for cash flow, accounting and corporate taxation. By following our experts' advice, you can already start optimizing your processes.
Would you like more advice on corporate accounting? T2inc's specialists help Quebec SMEs better understand their corporate accounting and taxation on a daily basis.
Request a quote from us to benefit from the expertise of our tax accountants.