If you want to stay in business, you have to be paid for your work. If you want to be paid, you need to invoice. Invoicing isn't hard, but there are plenty of mistakes and headaches that exist that can be avoided!
Of course number one has to be doing so in a regular, timely fashion. Here are the other top tips:
Include a due date: If you don’t give a deadline for payment, you can be sure that many of your clients will take plenty of time to get payment to you. The most common timeframes for payments listed on invoices are 14, 30, 60 and 90 days. In construction, with how important it is to maintain good cash flow, you should err on the side of shorter timeframes, and arrange in contracts for larger projects to invoice at multiple times during the course of the project.
List accepted payment types: If at all possible, you should accept PayPal, checks and credit cards. If you do accept checks, make sure to include your address on your invoice so clients can easily mail their checks to you. PayPal is a trusted option for online billing.
Keep thorough records of all the work you do: Make sure you keep records of your work. Your invoice should contain costs of all materials used as well as the hours and labor put into the project and any change orders you had to implement. Your clients are more likely to pay up quickly if they don’t have any questions about what it is they’re paying for, so it’s good to provide as much information on these invoices as possible.
Send the invoices to the right person: You should always make sure the person who receives your invoices is the person who actually manages payments for your client. If there’s an accounts payable email address, make sure the invoice goes there. Ideally, you want the invoice to be passed through as few people as possible so there’s no delay in it getting into the right person’s hands.
Try automation: Invoicing takes up quite a bit of time you could put toward other important areas of your work, so why not try automating it? If you don’t have to remember to send out your invoices or put the time into doing it, then this is a big benefit—the invoices go out automatically, and you can send automatic follow-ups as well, all of which help ensure you receive payment in a timely manner.
These are just a few examples of strategies you can use to be more effective in your invoicing practices and get payments in as soon as possible. For more information about staying on top of your invoicing as a construction company, contact us at Patin and Associates.