10 Veteran Business Owners share learned Guides about Invoicing Etiquette for Small Business Owners
In this insightful article, we’ve gathered the valuable insights of ten seasoned business owners who have navigated the intricate landscape of invoicing with finesse. Through their professional experiences, you’ll uncover tales of grappling with inefficient invoicing systems and diplomatically addressing overdue client invoices. Gain invaluable lessons as they share the challenges they confronted, the strategies they employed to overcome them, and their visionary plans for refining their company’s invoicing solutions. Join us on this enlightening journey into the world of effective invoicing practices.
Andrew Pickett
Lead Trial Attorney at Andrew Pickett Law
https://www.andrewpickettlaw.com/
I’ve been running my small business for the past 3 years, and during that
time, I have learned a lot about invoicing etiquette. One of the most
important lessons is to be firm but polite when getting your clients to pay
their invoices on time. This can sometimes be difficult because you want to
avoid alienating your clients, but it’s an important lesson to learn
because late payments can significantly impact your cash flow.
I’ve also found that patience and persistence are key in invoicing
etiquette. When clients don’t pay their bills on time, it’s essential to
stay in contact with them to remind them of their obligations and provide
gentle reminders about the importance of timely payments. I’ve seen too
many small businesses suffer from late fees or even defaulted invoices, so
having a firm but polite approach is essential to maintaining a healthy
client-business relationship.
Since my legal practice began, I’ve implemented a strict invoicing system
that allows me to generate and send invoices in an efficient and organized
manner. This helps ensure that my clients know their obligations and that
all payments are processed on time. In the future, I plan to continue using
this system while also refining it by exploring other options, such as
automated payment processing or utilizing the services of third-party bill
payment vendors.
Brian Schutt
CoFounder, Homesense Heating and Cooling
http://www.trusthomesense.com/
The challenge that we face, even after 14 years, is that we have technical
work being performed for non-technical customers disparately across the
city every day. In theory, all the work is communicated, understood, and
approved before it’s performed, invoiced, and paid onsite. In practice,
technicians don’t always communicate well, homeowners don’t understand, and
invoices don’t get paid as a result. In office leadership then has to jump
in and try to arbitrate the misunderstandings, and attempt to get paid in
full. Our best effort to improve this invoicing challenge is to leverage
our CRM in estimating and invoicing with detailed explanations, both
written and visual, to reduce the possibility of misunderstandings that
lead to invoicing issues.
Albina Mataj
Co-Founder of Bonheur jewelry
There was a particular instance where an important customer’s invoice went unmet for weeks, despite multiple reminders. The jewelry had already shipped for this wholesale account, and payment was drastically late. So, finding the balance between being firm and polite was crucial. I had to navigate the delicate line between asserting our terms and maintaining a positive client relationship. The major challenge lay in keeping communication open without coming across as confrontational. To overcome this, I initiated a personalized follow-up system, addressing each wholesale account’s needs individually and discussing payment status transparently. This approach, although time-consuming, proved effective in restoring timely payments. Looking ahead, I’m driven to enhance our invoicing solutions. We’re investing in intuitive software that not only automates the process but also offers customizable templates. This will not only save time but also provide a seamless experience for both us and our wholesale clients. Additionally, I’m focusing on clearer terms and policies from the outset, ensuring expectations are set right from the beginning. The lessons learned from the inefficient invoicing era have underscored the significance of firm professionalism, patience, and effective communication.
Christopher William
Founder of Balanced News Summary
https://balancednewssummary.com
One of the biggest challenges I have faced with client invoices is ensuring
that they are paid on time. To do this, I have implemented a few measures
to ensure that the invoices are properly tracked and followed up on. First,
I have implemented a payment reminder system that sends out reminders to
clients prior to the due date. I also have a system in place that sends out
follow-up emails to clients who have yet to pay their invoices.
Another challenge I have faced is dealing with late payments. To combat
this, I have implemented a penalty system for late payments. This system
involves charging a late fee to clients who do not pay their invoices on
time. This penalty fee serves as an incentive to ensure that clients pay
their invoices on time.
Min Hwan Ahn
Immigration lawyer
As the owner and a practicing lawyer at the Law Office of Ahn & Sinowitz, my
experiences with invoicing etiquette could probably fill a book. That said,
one narrative particularly comes to mind.
Many years ago, we had a client who was quite irregular with clearing his
invoices. Although the legal services were delivered efficiently and on
time, the payments weren’t reciprocated in the same manner. I had to walk
the tightrope of firmness and politeness, ensuring my tone was assertive yet respectful.
My team and I decided to implement an invoicing system that sent out reminders for due payments cleverly crafted in a professional tone, ensuring it maintained the dignity of both parties. This approach worked wonders over time — the client appreciated our professionalism and became more regular with payments. The key, I learned, was to be patient but persistent, and never shy away from communication.
In the future, I plan to leverage technology to bring more efficiency to our invoicing system. Having a streamlined system not only helps maintain a healthy cash flow but also ensures a smooth business relationship, which is essential for a service-oriented profession like law.
Wendy Wang
Owner, F&J Outdoor
As an International Trade Specialist and owner of F&J Outdoor, I manage the invoicing process regularly, and I have rich and rewarding experiences to share.
One lesson that was indeed a watershed moment in our business operations was when we faced significant delays from various clients in settling invoices. This adversely affected our cash flow and strained our financial operations. We learned the importance of communicating with clients in a firm but respectful manner, asserting our requirement for timely payments, but without compromising the relationship and future business opportunities.
I recall freezing in an incident when a significant client was repeatedly delaying payments, citing vague reasons. It was a tug of war between maintaining the client relationship and standing firm on our payment policies. I decided to approach it with patience and insistence. I scheduled a meeting with the client, highlighted how the delayed payments were affecting our business, and proposed a payment plan that could be feasible for both of us.
This incident allowed us to realize that our invoicing system needed to be more efficient and transparent. We invested in a digital invoicing system, which significantly simplified the process, made it easier for clients to make payments, and minimized delays. Moreover, we incorporated a crystal-clear payment policy in our contracts, which has made it easier to address any unmet invoices.
In the future, we are planning to incorporate predictive analytics into our invoicing solutions. This will help us gauge payment habits and predict any invoice-clearing delays before they occur, helping to streamline our cash flow management.
It is absolutely crucial for business owners and executives to approach invoicing with a balanced blend of firmness, politeness, and patience. It’s about creating a system that is efficient for the company and convenient for the client.
Diego Rubio
Founder — Vancouver Junk Removal
In my journey as a business owner, I have encountered instances where
efficient invoicing played a pivotal role in maintaining healthy client
relationships.
One lesson I’ve learned is the importance of clear and transparent
communication when it comes to invoices.
By providing detailed breakdowns of services and costs, clients gain a
better understanding of the value they’re receiving, reducing the
likelihood of misunderstandings.
At times, I’ve had to balance being firm yet polite when addressing overdue
invoices.
This requires patience and empathy, as well as conveying the importance of
timely payments to sustain both our business operations and the quality of
service we provide.
One significant challenge I faced was streamlining our invoicing process.
To overcome this, we invested in an automated invoicing system that sends reminders and notifications, ensuring both parties are on the same page regarding payment deadlines. This approach not only improved our cash flow but also enhanced client satisfaction.
Looking ahead, we aim to continue refining our invoicing solutions to provide even more convenience to our clients and maintain the strong relationships we’ve built. Our goal is to create an invoicing process that is efficient, transparent, and mutually beneficial.
Felix Naundorf
Marketing Expert & Founder of Bummelwelt.de
At the onset of my small business, I faced significant difficulties
related to invoicing. Clients would delay payment for services rendered,
leaving me with unpaid invoices and worrying about cash flow. I found that
having an efficient invoicing system, which allowed me to automate payment
reminders and offer payment incentives, proved invaluable in financial
management.
However, efficient invoicing alone could not solve my billing woes. I had
to learn when and how to be firm but polite when dealing with delinquent
clients. I had to be patient yet insistent, making sure my clients
understood that I was taking the situation seriously. During the process, I
had to gauge the client’s ability to pay and work with him/her to make
arrangements to settle the outstanding debt.
Through my exposure to this basic yet important aspect of managing a
business, I found that it is essential to build good working relationships
with my clients. I strive to be thorough and honest during every working
arrangement, and demonstrate respect and integrity in all my business
dealings. I encourage my clients to communicate their payment
specifications clearly, to avoid any potential miscommunication.
I now have a much better system of invoicing which enables real-time
billing and automatic payment reminders for my recurring clients. This
helps me to focus more on providing the best service to my clients, rather
than worrying about billing deadlines.
I have also developed a better understanding of the laws concerning
invoicing, allowing me to take proactive steps when dealing with clients
who fail to meet their payment dates. Moving forward, I plan to streamline
my invoicing system even further by embracing e-invoicing. This would help
me improve my financial processes, thereby creating a more efficient and
customer-friendly experience for business partners.
Mike Rumble
Tech Expert at a leading lie detector test company
I used to work for a small marketing agency that had a very inefficient
invoicing system. Invoices were often sent out late, and the process for
chasing up unpaid invoices was time-consuming and frustrating. As a result,
we often had to deal with clients who were late on payments, which put a
strain on our cash flow.
One day, I had a client who was particularly late on paying an invoice. I
had sent them several reminders, but they had still not responded. I
decided to call them directly to try to resolve the issue.
When I called the client, I was firm but polite about the invoice. I
explained that the invoice was past due, and that I needed payment by the
end of the week. I also offered to work with them to come up with a payment
plan if they were having financial difficulties.
The client was initially resistant, but I was patient and insistent. I
explained that their late payment was putting a strain on our business, and
that I needed them to take the invoice seriously. Eventually, the client
agreed to pay the invoice in full.
This experience taught me a valuable lesson about invoicing etiquette for
small business owners. It’s important to be firm but polite when chasing up
unpaid invoices. You also need to be patient and insistent, but not to the
point of being aggressive. By following these tips, you can improve your
chances of getting paid on time.
In the future, I plan to implement a more efficient invoicing system for my
own business. This will help to ensure that invoices are sent out on time,
and that the process for chasing up unpaid invoices is streamlined. I also
plan to offer more flexible payment options to my clients, such as payment
plans and discounts for early payment. By taking these steps, I hope to
improve my cash flow and avoid the problems that I experienced at my
previous job.
Ivan Marusic
Founder and finance advisor at Game Taco
In my journey as a business owner, I encountered a significant lesson in
invoicing etiquette that reshaped how I approached client payments. Early
on, I had a rather inefficient invoicing system that often led to confusion
and delayed payments. There were instances when I had to navigate the
delicate balance of being firm yet polite about unmet client invoices. It
was challenging to address the issue without straining relationships,
especially when cash flow was essential for sustaining operations.
One memorable experience involved a client who repeatedly overlooked their
invoices. Patiently, I maintained open communication, gently reminding them
of the outstanding payments. Eventually, I had to be more insistent, but
always with professionalism. This experience taught me the value of setting
clear expectations from the outset, ensuring clients understand the terms
and deadlines. Moreover, it highlighted the importance of maintaining a
respectful tone in all interactions.
Overcoming these challenges led me to revamp our invoicing process. We
implemented user-friendly software that streamlined invoicing, payment
tracking, and reminders. The solution automated routine tasks, reducing
errors and misunderstandings. Looking ahead, my company plans to continue
refining our invoicing system, embracing innovative technologies that
enhance efficiency while preserving the human touch in our client
interactions.
As a business owner, I firmly believe that addressing invoicing matters
assertively yet respectfully is crucial for sustaining healthy client
relationships and maintaining a steady cash flow.
Joshua Wood
CEO and founder of Bloc
I learned the hard way with a client that didn’t pay an invoice for over £5k and it took a year to retrieve the money through the court system. I was too easy on the client and let too much time pass. Now I include policies in our contracts with clients that clearly outlines what happens when invoices are unpaid for a certain amount of time. After 1 month of an unpaid invoice we send a kind reminder via email. After 2 months we send another email and if it’s not replied to we call the client to discuss it. If after 3 months we can’t get in touch and the invoice is unpaid we threaten legal action and offer a payment plan. After 4 months we get legal involved and allow them to try and get in touch with the client. All of my account managers know the policies and the timelines which means everyone is on the same page. Thankfully so far it’s worked well and we haven’t had any clients who have taken too long to pay.
These experienced business owners generously share their hard-earned wisdom and invaluable guidance to help fellow entrepreneurs navigate the intricate landscape of invoicing. From best practices that ensure prompt payments to strategies for building stronger client relationships through effective invoicing, this collection of learned advice is a must-read for anyone seeking to optimize their invoicing process and propel their business forward.
