Any good business must have a smooth running invoice system set up and running in their company. In order for a company to sustain itself it is a good idea to have a collection plan and payment plan in place. Smart invoicing is the key to getting paid and avoiding loss of income in the long run.

Invoicing In’s and Out’s

The first step to setting up an invoicing system is for the owner or manager of the company to learn the ins and outs of the financial part of their business. The owner should know their products, services and client base. Most business owners utilize the basic system on excel or they use quick books for their billing needs. There are also other online management systems that some businesses may utilize.

The owner should list all open invoices by project or weekly occurrence or monthly billing forecasting. The look of invoices should be professional and they can be administered by email, or printable hard copies. Whatever the delivery system it must be something that is easy to understand and explains the product or service purchased, the hours worked, expenses, amounts due and the due date.

Billing Policies

There should be a payment policy in place for all customers especially new customers. The first time customers should be made aware of policies up front and older customers have to be reminded of polices continuously. The terms of the sale agreement and the pay by dates should be explained clearly and politely. The wording in the policy should easy to understand and straight forward, a sense of good will should be created with the customer. The payment schedule and any possible arrangements have to be explained clearly. A collection policy is and excellent plan to have in place right along side the payment policy. A follow up plan needs to be put in place for collections. A time line can be established consisting of emails, calls or letters.

Laws and Regulations

Smart invoicing and accounts receivable go hand in hand for running a smooth profitable business and sometimes outside assistance may be needed. Credit agencies, management companies and collection agencies can help to take over situations that may not be easily managed by the original business. The collection laws and procedures should also be studied and kept on file for basic situations that occur in the business.

Conclusion

Keeping track of customers contact information, orders and due dates is a must for keeping track of payments. Every business must learn the laws and regulations for their state to ensure they are aware of the payment policies and collection policies. Smart invoicing and keeping up to date account receivable is a major part of running a smooth profitable business, and whether it is on excel or an online management system the goal is the same. The goal is to create invoices with payment and collection policies attached and a friendly voice communicating these things to clients, to ensure payment. Every business wants to be profitable and long-lasting with acquiring new customers on a regular basis.

Author Bio: Christine writes about a variety of lifestyle topics. For more information on purchase order funding, visit http://factorfunding.com/index.htm.

Category: Business
Keywords: Accounts Receivable Funding, Invoice Factoring, Factoring, Asset Based Loans, Commercial Capital, Bu