So your client is purchasing good from you, and you are all set to process the product. Now you have to invoice your client to get paid!
Undoubtedly, invoicing is an inevitable process in every business industry, and e-commerce is not excluded from this phenomenon as keeping cash flow positive and consistent is indispensable.
Unfortunately, invoicing is quite painful as remembering to send invoices each month and chasing payments is grueling. But you have to encounter all the challenges and efficiently take care of bills to get paid on time.
If you want to streamline this process to keep your cash flow positive, you have to plan. But before planning, you should understand what type of e-commerce business you are running and plan accordingly.
- Business to Business (B2B)
- Business to Consumer (B2C)
- Consumer to Consumer (C2C)
- Consumer to Business (C2B)
To implement an effective strategy, comprehensive study of your business niche is vital for serving each client accordingly. At the end of the day, you want your clients to be satisfied with the approach, and you will also receive some financial rewards.
Keeping all the above factors in mind, we’ve outlined some effective invoicing strategies for e-commerce businesses that will work in tough situations:
Make effective policies to keep the payment process seamless-
This is one of the best ways to stay three steps ahead of your competitors and your customers’ expectations. Strategic invoicing policies in place will help you sidestep any hostile confusions or shocks when your clients receive their invoices.
Invoicing policies will help you maintain an understanding between you and your clients. However, keep your policies flexible so that you can adjust it later on as it is recommended when your business grows you will get a better understanding of your clients’ needs and wants.
Whether you have big e-commerce or working solely, figure out the payment procurement process to stay consistent and get paid on time:
- Keep an upfront payment process and offer installment options as well
- Set a time period for each invoice, but make sure don’t exceed 90 days’ timeframe
- Decide on a late fee charge whether you want to keep a fixed amount or percentage
- Accept bank transfer, credit cards, debit cards, PayPal, etc.
- Make a policy whether you will deliver product or services after payment or before
- Have a refund and return policy
Don’t forget to list a due date and then create quotations-
This is one of the most effective things you can do in your accounts receivable as listing a due date offers deadlines to your clients, and they have to follow that timeframe. If you sent an invoice that doesn’t include a due date, then keep waiting for the payments.
However, it is obvious that you can’t force someone to pay by the set due date, but it eventually increases the chances of timely payment.
Don’t forget to create quotes before each order. A smart strategy involves having a written agreement for everything. Whenever you deal with other businesses, mention all the terms and conditions in agreements as these agreements are legal and play a significant role in any dispute or confusion arise.
However, you can create quotes for general orders that include a few products, but when you receive a large order, business owners may ask you for quotations. So before creating a quote, keep the following aspects in mind:
- Expectations of your clients
- Agreed timeframe with regards to product delivery
- Extra charges for additional services such as shipping of good or more
Make a smart move and automate as much as you can-
Automating your invoicing process will be a smart move as you don’t have to think much about your invoices. Just forget about remembering dates, sending invoices, manual entries and preparing Word or Excel invoice template.
Software’s like QuickBooks, FreshBooks, FreeAgent, Wave Accounting, etc., are hit in the market for their seamless invoicing processes. Say goodbye to heaps of paper and welcome automated receipts in your office! The online invoicing software helps you generate detailed and professional invoices quickly and effortlessly. And the attractive part of the world “online” is, everything is in the cloud- you don’t have to install any software or download on your computer.
All the data is saved on the cloud; you can invoice your clients from anywhere- as long you are connected to the internet. You can set recurring invoices to alert your clients timely and add more users who can help you with invoicing. So just set and forget! Try to eliminate the invoicing process from your daily routine so that you can focus on business growth, sales, etc.
Offer discounts on early payments with polite reminders-
Now that you have applied all the strategies to get paid on time or even early, how could you forget to offer early discounts? Yes, you read it right! Instead of waiting for the last due date, you can send reminders to your clients along with some amazing discounts. Your clients will get excited if they love your offer and may pay you early to save that $10.
This could be the best, simple and easy strategy to get paid early as well as establish a better relationship with your clients. Looking at your offers, they won’t feel offended about the reminders.
To avoid bad debts, follow up with a call-
A time comes in every business when their most loyal clients try to play hooky with them. They might not respond to any your email reminders you have sent and in this age of technology, staying away from mobile or not checking emails is impossible. You might think what is wrong or get frustrated with this behavior, but calm down! Take a personal approach and call your client.
Being a business owner, you cannot use harsh words even though you are annoyed by your client. Be polite and tackle the situation in a diplomatic way. If you meet directly with your client, there’ll be fewer chances of hiding behind the bush. You can ask them for the last payment date or negotiate on the amount to sidestep increasing your bad debts.
It has always been difficult for businesses to get payments from their clients and customers. As a result, businesses fail to pay their own outstanding.
However, you cannot control everything, especially, clients’ payments, but you can change the way you invoice your clients. By implementing the strategies mentioned above, you may perhaps receive quick payments.
Author Bio – Tracy Watson is a business development manager at Accounting To Taxes– a well-known company offering complete finance and accounting services. She has always been a great contributor to the accounting industry and also responsible for branding and lead generation. And being a passionate writer as well she helps businesses with her informative articles.