Past due invoices happen for all kinds of reasons. At CannaBIZ Collects, we’ve pretty much heard them all. What we’ve found over the course of many years in the collections business is that past dues can sometimes be prevented altogether with pro-active, in-house measures.
The work you do before you send the first invoice can prevent accounts from ever becoming delinquent in the first place. Frequent communication, follow up when an order has been received, and a confirmation after you send an invoice can circumvent issues down the road.
Like we said, past dues happen for many reasons. However, in some cases, an invoice can go unpaid over simple stuff… stuff you can quickly remedy!
Three of the top reasons come to mind:
- Payment can be delayed because your customer finds your invoice confusing.
- Delays happen when a customer finds what he believes to be an inaccuracy in the invoice.
- Late pays happen when a customer claims that an invoice was never received.
The Confusing Invoice
Just like you, your customer is a busy person. You certainly don’t want to make paying an invoice difficult in any way! If your invoice is confusing or complicated, it can get placed in a ‘to do’ pile, which will delay payment.
Start with clear, easy to read invoices that prominently display the information your customer needs to know at a glance.
Use a hierarchy layout to help readers define how they should read the content. This also helps readers navigate by browsing and scanning, which is necessary when invoicing because you want the customer to find the following immediately:
- Heading- “INVOICE” should be the heading. The customer should clearly understand that the document they are holding is a bill that requires payment.
- Your Business Name- Customers need to know who the invoice is from. Most expect your business name to appear in the upper left-hand corner.
- The Amount due – Make sure this is very clear. Too many invoices offer optional amounts (e.g., past due balance, discounted payment, partial payment, etc.) without making the current amount due distinct and obvious. The amount due is usually expected to be in the lower right-hand corner.
- The Payment terms- Terms might include discounts given for quick payment or finance charges applied for late payments. If you offer payment amount options like these, you may find it necessary to add this information to your invoice. However, keep the font size small for these amounts so they are not confused with the current amount due.
- The Invoice number, Date, Due Date- The customer will use this information in their bill paying system. The due date should stand out. Most expect to find this information in the upper right-hand corner.
- Method of payment accepted- Payment options should be clearly stated to make your invoice easy to pay.
- Your contact information- Include this information in case the customer has any billing questions. If you make it hard for customers to get their questions answered, you won’t get paid!
- Lots of white space makes an invoice easier to read and quick to scan. You may wish to use color to draw attention to certain areas of your invoice.
- Pay careful attention to the font you select. Font legibility can play a key role in how quickly you get paid.
When you first establish a relationship with your customer, we advise showing them an invoice at the same time that you go over payment terms. That way you can familiarize your client with the layout of your invoice and they can ask clarifying questions.
The Inaccurate Invoice
When there’s an inaccuracy on an invoice, payment usually slows to a crawl. Your customer will either call you immediately, eating up your time and theirs, trying to sort out the discrepancy or your customer will put the invoice aside in the problematic pile to deal with at a more convenient time.
Either way, payment is delayed and now have created the potential for distrust, inherently slowing future payments.
It’s worth your time to check and double check invoices for accuracy. The more time spent on an invoice initially, the less time it takes overall if it’s accurate.
The Missing Invoice
In many cases, you can remedy the ‘missing invoice’ scenario simply by asking your customer, “What do you prefer: Email or mail?”
Your customer may have a dozen reasons for picking one method of invoicing over another. No matter what those reasons are, if you accommodate your customer’s preference, you’re much less likely to hear, “I never got your invoice.”
Some customers may not have a preference, leaving you to make the decision. Many companies turn to technology to invoice customers using email as a way to instantaneously invoice and save money on postage at the same time. When it comes to using email versus regular mail, there are many things to consider, so be sure to review all your options.
When tackling these three issues by creating a transparent, easy to understand, practical invoice document, you are taking the right steps to reducing the risk of revenue loss, and helping avoid affecting your customers’ faith and loyalty through invoicing errors. We hope you take a moment to relook at your invoice layout and make the necessary changes.
Are you having a hard time getting your customers to pay you on time? Wondering if you should go through a collection agency? Click here and read our previous article. Keep an eye out for our next article and if you have any questions email us here.
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