Common Invoicing Errors (And How to Prevent Them)

by / ⠀Finance / September 8, 2022
common invoicing errors two people fixing them

Invoicing might not be the most attractive topic in the world, but it’s certainly important. It’s the last leg of monetizing your services. Yet so many businesses fail to consider each of the steps in the process. Here are some common invoicing errors and how to prevent them.

Don’t Make These Mistakes Any Longer

Most businesses struggle mightily with invoicing and don’t even realize they’re messing up. The same might be true in your own organization. In this article, we’re going to take a look at some of the most common invoicing errors and mistakes that are made (and how to prevent them within your own organization). This isn’t a complete list, but it should give you a pretty decent idea of potential issues festering beneath the surface.

  • Not Sending Invoices on Time

It’s important that you send invoices as soon as possible. Otherwise, they can be forgotten about (either by you or the customer). Don’t wait until the customer asks for the invoice. You might have a couple of thoughtful customers who do this from time to time, but it’s not common. Your customers are busy. They have stacks of unpaid invoices. The sooner yours gets into that stack, the faster you’ll get paid. 

  • Failing to Specify Due Dates

Be very, very specific with payment terms and due dates. Sending an open invoice without specific payment terms is a huge mistake that will come back to bite you.

Always be mindful of who you’re interacting with. If it’s a small company or a one-person business, don’t assume that they understand advanced accounting terms like “Net 30.” Spell it out for clients and let them know the terms in writing. 

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For example, rather than saying an invoice is due 30 days from receipt, put an exact payment date – e.g. September 1. This eliminates any possible confusion. 

  • Not Itemizing Services

Depending on the client, breaking down services in an itemized list on the invoice is extremely helpful. Some clients won’t even pay attention to an invoice that isn’t itemized. They need the itemized breakdown in order to complete their own internal accounts payable practices. 

Itemizing services from the get-go helps you stay organized, but it also increases the efficiency and speed of payment. It’s a small detail that makes a big difference.

  • Sending to the Wrong Person

This is a big one! You can get everything right with the invoice, but send it to the wrong person within the organization. This either leads to a dead-end, or it takes days or weeks for the invoice to find its way to the right person who can actually approve and process the payment. 

When onboarding any new client, make sure part of your process is gathering the contact information for the correct accounts receivable individual. You should have multiple forms of contact for this individual/department. 

  • Not Following Up

Have you ever sent an invoice, waited two weeks, and then grown frustrated because the payment was late and you received no acknowledgment of the invoice being received? Then you followed up and received a quick apology within a couple of hours.

This happens all the time. Clients forget, an email goes to spam, or something else happens out of their control. The best way to avoid issues like this is to follow up consistently and promptly. In fact, you should create an automated follow-up sequence at predetermined intervals to ensure you don’t forget. Paperless invoice processing, which is entirely digitized, makes this easy to do this.

  • Including Errors

A single error in an invoice can unnecessarily hold up payment and slow down your accounts receivable workflow. Double-check everything before sending an invoice. This includes the invoice number, amount, due dates, itemized services, spelling errors, etc.

  • Making Payment Difficult

Don’t make payment unnecessarily difficult. Do your best to include as many different options as you can. 

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Offering multiple payment options is one of the easiest ways to avoid late payments, common billing errors, and frustrated clients. It might require a bit more fine-tuning on your part, but ease and convenience for customers are what matter most.

Improve Your Invoicing

Improving your invoicing has the potential to change a lot of things within your business by increasing efficiency, reducing frustration, and bolstering the bottom line. If it’s been a while since you studied or evaluated this arm of your business, now’s the time to lean in and analyze your processes with a bit more precision to fix common invoicing errors.

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