Effective Invoicing for SMEs

At some time or other small businesses will experience late payments from their customers which can make invoicing a stressful procedure, but there are ways you can avoid this unfortunate situation. Here are our tips and ideas for effective invoicing.

Businesses should keep their documents clear and straightforward with accurate information regarding their company, as well as the customers being invoiced. Furthermore, by using a system that allows you to store customisable information about your customers you can easily keep your records up to date and use them as a point of reference in the future.
It is crucial that businesses are aware of HMRC and its requirements for retaining the last six years of financial records which is made much easier and more effective if it is done electronically. OPS gives you the opportunity to keep that data stored as well as completed and rejected transactions through the live reporting and back up system. This not only means that you can meet HMRC requirements, but also make the most of an automatically updated record system.
Ineffective invoicing might not necessarily be caused by customers themselves. If a business is not informative enough or doesn't keep their clients up to date with the latest news or transactions, then invoicing and late payment can become an issue. A useful tool that will help you to avoid this situation and help to protect your business' image is Open Payment System. Our automated SMS and Email Reminders help to enhance the relationship with your customers and establish effective communication.
Moreover, effective communication may fail due to the fact that some businesses can lose focus at some points. The best plan is to be organised from the very beginning by following your procedures.
In business you must always be ware of you customer's company. You have to make sure that it is a registered and genuine business. You can search your customer's profile and even ask your sales team to investigate more in depth details that may be of the concern to the company. Ask your team to research information from the very basic details such as the address, to the contacts they might have and learn about the customer you are about to deal with.
You should raise all your payment terms and negotiations together with the price end be clear towards your customers by offering them the complete service pack from the very beginning. If you follow this process your business is more likely to achieve an effective process.
If these actions fail don't worry because there are other ways to enhance your payments procedures and that is through the law. If your customer does not pay you on time they will be charged 8% over the base rate. By March 2013 the EU directive on late payment will be launched. The Department for Business, Innovation and Skills will be arranging a relevant consultation.

Find out more about this in our blog post.

The need to stick to your payment terms and be clear about your procedures is vital because they need to be highlighted in order to avoid excuses from your debtors. To make sure that your invoices have arrived, OPS allows you to upload them as a PDF file and then debtors can receive a copy of their invoices.
Even though legislation is there to protect your business, one of the worst actions you can take is legal action. By imposing statutory interest on an overdue invoice action you can make your client unwilling to deal with the issue and prompt them to switch suppliers. This is why it is important that you understand your customers and their payment behaviour. By doing this you can minimise the possibility of late payments. You can monitor and manage payment schedules effectively with OPS by creating recurring and instalment payment schemes for each customer, allowing you to maximise the chance of receiving their payments.

If OPS sound like it will improve your business then you can find out more by contacting our client services team on info@openpaymentsystem.com

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Effective Invoicing for SMEs