The Slow Death of Invoicing

Invoicing was born out of the need for larger companies to have flexibility when dealing with inflows and outflows of cash from various sources. Accounts payable allows companies the time to bring in cash from customers and evaluate which bills should be paid in what order.

Small businesses adopted these standards so as to emulate their bigger and more established competition. “Hey I’m a small business, but I conduct my operations just like the big guys!” Small business care with big business mindset.

This “invoicing standard”, however, has also spilled over to independent professionals and freelancers. But why? Most service professionals are dealing face-to-face with clients at lower price points that can be paid on the spot (and even upfront!).

Times are changing and so is technology. Service professionals should not be stuck in the old ways of tradition. About 50%* of most service professional clients are new customers (the rest recurring) — and without any type of relationship, who knows which clients will pay the bills on time (or at all!). Business owners should have some sort of upfront payment security going into each job.

But to be fair, the same argument can be made for the client. If, for example, the business asks for the client’s credit card to put on file upfront, how does the client know that he/she is protected? The client goes from full flexibility with invoicing, to zero control with the credit card in the hands of the service professional before any work is done.

The answer is: there needs to be a happy medium.

Time is money, and for the service professionals doing multiple jobs a day, they need to ensure someone is taking care of payment. As for the clients, they might not want to hand over their credit card to an unknown business, but to a verified and independent 3rd party, that makes sense.

“Invoicing” is a business term of the past and leaves the independent professional completely unprotected. In this day and age, there should be a trusted technology that meets business and client in the middle — payment is guaranteed if and when service is delivered. End of story.

* Proprietary PocketSuite market research.