CHAPTER 11
Invoicing & Collections
Time to collect
When it comes to invoicing it is imperative to stick to the terms of any signed contractual agreement. You should invoice directly after delivery of your completed work. Invoicing through email, texting or faxing is not recommended yet common practice in today’s business world. I’m old school and like to send, mailed invoices even if I’ve emailed previously. Invoices should be “numbered” for the benefit of both parties. These documents may need to be looked up and resent. The ability to refer to numbered invoices makes them so much easier to locate.
Self promotion through personalized invoices
When you can afford them, personalized invoices give you an air of credibility. You can self publish or purchase personalized invoices from various companies. Good practice is to have your business name or domain name along with address, email, phone number and web address on your invoices. There should be a place to input the client and their address and phone number. You can list line items or just the total amount for the project completed. The invoice should also state: “make payment to:” and of course your business name or personal name, whichever you use regularly. At the bottom of every invoice a: “Thank you for your continued business.” is a practical statement and has a nice look.
Budgeting advice
Until you are comfortable with the income flow you have created it is important to budget your funds wisely. It can be a project that has stalled or a client that has extended the work and the money you thought you’d have is suddenly delayed. Unforeseen reasons why funds can dwindle must be prepared for and budgeted against accordingly.
Good practices limit the collection worries
It is a healthy practice to make follow up calls for payment fifteen days after invoicing. You might find that a client has not received or misplaced your invoice. Be prepared when calling to immediately email or fax a copy of your bill. Re-invoicing is costly and unproductive. Always make a call when a client is about to face a late charge and be prepared to collect payment over the phone. When sixty or ninety days have passed a collection letter can be sent. Emailing collection notices are not recommended.
There are so many reputable and excellent paying companies out there so never let collections bog you down or cost you from catching your next assignment. Stay productive at all times by keeping detailed billing documents. Accounts receivable files should always be handy; but, they should never interfere with your productivity. You can deduct unpaid invoices from your gross income when you file your yearly tax returns. There are also collection agencies that will work for you without any upfront fees.