Is invoicing the bane of your existence? Do you dread the end of a billing cycle? Are you cutting yourself short because you’re not following up with clients who have yet to pay you? If you answered yes to any of these questions, you’re in the right place. Modern invoicing tools are revolutionizing how freelancers, contractors, and SMEs (or small and medium-sized enterprises) bill their hours. But it wasn’t always as easy as it is today to get paid quickly and seamlessly.
You may be surprised to learn that the concept of invoicing dates back over 5,000 years! In the historic days, IOUs were filled out in clay as merchants bought goods from each other. With the printing press, clay turned to paper as invoices were sent and delivered to each other. The rise of technology led to digital invoicing, allowing individuals to send bills via email and electronic platforms. Today, invoicing software tools make it easy to send payments in a timely, efficient manner.
Below are a few ways that modern invoicing software is a game-changer for freelancers and SMEs and the benefits of using this software.
Templates Make Things Easier
If you’re a freelancer or contract worker, there’s a good chance that you have multiple clients. You likely have different payment terms for each one. Perhaps one client wants you to bill at the end of the month while another one wants you to bill them weekly. Creating a custom invoice for each client can be time-consuming, taking you away from the work that you are actually getting paid for! That’s where templates come into play.
Invoicing software tools include templates that you can easily customize for each of your client’s needs. These templates allow you to add your personal details, including a branded logo and colors. Adding these touches makes the invoice feel more professional than a black-and-white PDF document. Additionally, customizing your invoices strengthens your brand image and can build better relationships with your clients by showcasing your professionalism.
Invoices that stand out and are easy to read and understand are more likely to get paid quicker too. When a client recognizes your invoice, there is less confusion at stake. They know who you are and why you are billing them. This can improve payment speed and result in prompt delivery.
When selecting a template, make sure it fits your needs. Someone who bills hourly will need a different template than someone who is billing by project. Make sure it allows you to include all necessary information. This includes invoice date, description of project or services, client contact information, and total amount due. Save the invoice template for future iterations so you just have to adjust the project and total amount.
Insightful Reporting and Real-Time Visibility
Another time-saving benefit to using invoicing software is its ability to provide insightful reports. Instead of manually calculating where you are at the end of the month, quarter, or year, these tools will automatically generate financial reports for you. Not only does this save you time, but it reduces errors.
Having this data means you have real-time visibility of where your business stands. Knowing you’re having a less profitable month, for example, you may decide to focus some attention on pitching potential new clients. Perhaps you put a call-to-action out on LinkedIn describing your services and notifying others that you’re open to work.
By looking at your report, you can also see which clients are providing you with the most revenue. If you’re spending more time on one client but not getting paid as much, this should raise a red flag. This data can help you either negotiate a better rate or decide if keeping the client is the best decision for the success of your business. After all, time is money and your time is valuable!
Payment Management
Freelancers often experience unpredictable income month-to-month. Because you can’t predict the future, you can’t accurately know what your income will be next month let alone six months from now. That’s why payment management is all the more important to solo entrepreneurs. A client who is tardy on billing can alter your livelihood, making it harder for you to pay rent or bills on time.
Invoicing software platforms can automatically remind clients who have yet to pay you. By sending a reminder during a set cadence, you can follow up in a professional, courteous way. The software will update based on when a client has paid you — no more scrolling through your bank account looking for payments! If you notice that a client is consistently delaying payment, you can ask to have a conversation with them. Ask if there is a better payment schedule that will work for them or if they have any suggestions on how to resolve this issue. You may decide to implement a past-due invoice fee if the problem recurs.
Final Thoughts
Invoicing is easier than ever thanks to the introduction of modern invoicing software. New technology has made it incredibly simple to create, send, and check invoices. This software is easy to use and keeps everything organized in one place, allowing you to focus on the work that you’re being billed for.
Written by Scott Weathers
