SCORE Tip of the Week: How Smart Invoicing Can Boost Your Profits
Mel Ettenson of SCORE Detroit shares advice for effective invoicing.
Small business owners agree that invoices are more fun to give than to receive. But paying more attention to your invoicing can give you insights into the inner workings of your business—and might be a smart way to increase profits, too. A simple bill just states the exchange of money for goods or services. A well-thought out invoice, on the other hand, can be a tool to help you get paid faster and build your business.
Here are some innovative ways to use invoicing for maximum benefit:
- Stand back from your invoice and look for ways to think outside the box, communicate with customers, use smart marketing and capture additional sales.
- Use invoicing as a way to communicate with customers to promote new products and suggest complementary ones. Another idea is to include a “how are we doing?” survey. If you can afford it, offer a discount for any customer that fills the survey out and sends it in.
- To increase your cash flow, offer a discount for early payments. Be sure the cash flow benefit is big enough to justify the discount. If you’re not sure, ask your accountant.
- Be sure your invoice clearly states all the necessary terms and conditions, such as ownership transfer, return policies and anything else that could potentially be disputed down the road.
- Invoices today can be generated from your small business accounting software, which makes it easy to track customer buying and payment patterns. Regularly observe these patterns so that you can pinpoint your best and worst customers and market accordingly.
By following these simple steps, you can turn your invoicing from a chore into a growth strategy for your business.