Think about this for a second: All the effort trade business owners put into their work, training staff, buying stock and so on basically counts for nothing until the moment you sit down to create an invoice.
An invoice is the only way to get payment from your customer, the only way to get money coming into your business so you can maintain a healthy cash flow. Yet, so often invoicing can feel like one of those after-the-job-is-done chores you just want to get done without putting too much thought into.
That’s why creating a simple, easy-to-follow, invoicing system is so important for your trades business. You should be putting as much thought into how you invoice, who does it, when it’s done, as you do into what goes on on the job site.
Four invoicing tips to get started
Dedicate time to invoicing
You or a member of your team should be dedicating at least an hour to invoicing - nothing but invoicing - every working day. As your business grows, so too should the time you spend dedicated to invoicing.
You’ll also need to set targets as to how many hours it should take to send out an invoice after the job is done. Ideally, you should aim to get 80% of your invoices out within 12 hours of completion.
Tough ask you say? It shouldn’t be if you or a member of your team are treating invoicing as your number one priority. If you’re using job management software, just make a habit of turning the accepted quote into an invoice as soon as the work is done.
Making it easy to pay
Make sure your preferred method of payment is clear and easy-to-read.
If you prefer getting paid by credit card (which statistics say will get you paid faster), make sure this option is front and centre on your invoice and consider swallowing any credit card payment processing fees to make it even more attractive.
Presenting your invoice to the client
When it comes time to present your invoice to your customer, you need to explain the true value of what you’ve achieved. The total cost is only one-side of the story, what really matters is that you’ve solved their problem and, preferably, gone above and beyond what your competitors might have done.
Start at the beginning, with the problem your customer had. It could have been a faulty switchboard that was a fire risk or it could be a dated, mouldy bathroom.
Next, explain how your team worked to solve their problem and how the work they did went above and beyond the bare minimum. If you can claim the work you’ve done is above and beyond the building code, then now is the time to make it clear to your customer. Make sure you also include any issues your team came against along the way and how they overcame them.
To end with, explain how the job you’ve delivered has fixed their problem. For example, they’ve now got a brand-new, mould-free bathroom that’s going to put an end to their condensation issues.
After you’ve explained the true value of your service, your customer is much more likely to be happier paying your invoice, and more likely to pay it immediately.
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Chasing late payments
Now comes for the most uncomfortable part of the invoicing cycle. Chasing late payments.
No one enjoys this task but at least technology has made it easier. Make sure you’re using job management software that allows you to “set and forget” invoicing payment reminders. Fergus automates SMS and email payment reminders so you can rest easy knowing late invoices are taken care of.
The next bit is not so easy. Give the customer a call to find out why they haven’t paid. If they’ve just forgotten, see if you can get them to pay by credit card or internet banking while they’re still on the phone with you.
If the customer doesn’t have the money, you could consider setting up a payment plan.
For more tips on getting rid of late payments, check out our top tips on stamping out late payments.
Need help creating a smarter invoicing process?
Managing invoices can be a challenging part of running a trades business but getting it done right is extremely important to ensure your business gets paid on time. Fergus’s job management software cuts out double handing invoices and allows you to stay on top of payments, providing a healthy cashflow process.