What’s the difference between playing Candy Crush on your phone and invoicing? One sucks up all your time (without regret) and the other sucks up all your time AND energy with little to show for it. That's why the topic of learning how to reduce invoicing time takes center stage today.
We’ve all heard the phrase, ‘Life is too short’, and when it comes to invoicing, that expression has never rung truer. Reducing invoicing time is one of the top goals of accounting departments and their leadership across industries. Eighty-two percent of finance departments are overwhelmed by the high numbers of invoices they are expected to process on a daily basis, according to research done by Wax Digital.
On top of all the other low-impact tasks that AR Specialists are doing day-in and day-out, invoicing ranks high on the priority list; and when that assignment takes hours to complete, it can affect other aspects of the accounting function. Read on to explore how you can reduce invoicing time in your accounting department.
How to Ensure You’re Getting Paid on Time All The Time
Nothing gets an accounting professional’s heart beating faster than waiting for a client to pay their bill. One week passes and you shrug it off, making a note to follow up. A few more days pass and now you’re starting to question if they even saw the invoice. Then it’s been a full month, and you’re still waiting -- leaving you wondering how could they not pay their fees in a timely fashion? On top of that, now you’re in a position to hound them to collect. Maybe it’s high time to reevaluate your invoice processing - starting with delivery and ending with the look and feel of each invoice to help alleviate this issue before it begins. Here are two ways you can ensure you’ll get paid on time (every time).
Change the way you send invoices. Most clients receive invoices two ways: via your friendly mailman or via email. Guess which one they are more likely to pay first? If you guessed email, you’d be correct. Sending an electronic invoice not only ensures a safe delivery (as long as you have the correct email on file), but it’s also easier to store and organize for future billing.
Review your invoice content. A sure-fire way for your invoice to end up in the trash is by making it appear like junk mail. Before sending out an invoice, consider this:
Is my company’s logo on the invoice?
Is the due date easy to find (and read)?
Is the content accurate (client name, address, payment amount)?
Is there a ‘Pay Now’ option available?
If you answered yes to the above questions, then getting paid on time just became easier.
What Happens if You Take All the Right Steps, But Your Still Not Getting Paid?
Sending out an invoice and crossing your fingers you’ll get paid on time is fine, but what if it’s not enough? Do you have a process in place if your clients are supposed to pay in a set amount of days? Is there a designated person on staff to handle situations like this? It’s no secret that clients are willing to pay more for first-rate customer service and implementing that into your invoicing process can have a pretty great return on investment. Communication is key!
Be sure to include a follow-up protocol into your overall AR process that addresses the issues above. Perhaps one individual on your team (ideally one who holds the relationship with the client) first ensures that they are reaching out to the right person there, and secondly has a cadence of when to reach out when checks haven’t been received. Assigning this task with the same procedure for each client ensures that nothing falls through the cracks.
Take the Headache Out of Reoccurring Invoicing Mistakes to Reduce Time
Mistakes are inevitable – incorrect information, the wrong due date, and more – but what happens when these mistakes become a revolving door? These oversights can lead to payment delays (or not getting paid at all) and that’s something your company can’t afford. A one-time fix doesn’t fix the root cause, it only treats the symptom. To prevent recurring inaccuracies from happening on the next billing cycle, here are a few ways to take charge.
Training staff. A study done by Middlesex University’s Institute for Work Based Learning showed that 56 percent of HR Managers considered training and development to be an essential business enabler. Ongoing training (or re-training on the software your staff is utilizing) will help curb recurring mistakes going forward.
Create a process in place. Inevitably, something in your ERP system is going to steer you wrong (incorrect data, outdated technology, maintenance, and more). There’s no one-size-fits-all invoicing process. What works for your team might not work for another. By creating an effective process, you’re ensuring that the issues that might pop up are nipped at the onset.
Take the time to correct the mistakes. If mistakes are continuously happening, it’s time to get a second set of eyes. A one-off mistake happens; repeated mistakes should make you pause and take a step back to consider the next course of action. Having someone else on your team review your invoices before they go out can help you catch errors such as:
Wrong due date
Typos and grammar mistakes
Incorrect name, address, and payment
Not Having Enough Time to Focus on Strategic Tasks
We’ve all fallen victim to the ‘I don’t have time’ paradox. It’s a vicious cycle that leaves us desperate for a way out. Spending copious amounts of time on invoicing means you don’t have time to focus on other big-picture items like analyzing data and strategizing. According to research done by Ardent Partners, the average time to process an invoice is 8.6 days. Here are a few ways to speed up the invoicing cycle.
Designate someone (or a few people) on your team to take charge of the invoicing process. You’ve probably heard of the phrase, ‘It takes a village’ – by spreading out some of the workload, you’ll avoid being stuck in an invoicing gridlock.
Invoice immediately. The faster you send out an invoice, the quicker you’ll get paid. Make it a habit to send an invoice as soon as work is completed – the project will be fresh in the mind of your client as well as yours.
Follow-up on late payments. If a client’s invoice is past due, it’s time to send them a friendly reminder (phone, email, mail). Continue sending reminders at set intervals (once a week) until they pay you.
Feeling the Burn? Reduce Your Invoicing Time
We’ve discussed – in depth – ways to decrease your invoicing time, but here’s a different approach: outsourcing. Maybe you don’t think outsourcing and invoicing go together, but you’d be wrong. In fact, we’ve dispelled a few myths associated with outsourcing in Top 5 Outsourcing Myths: Why It’s Easier Than You Think, and that includes outsourcing tasks in your AR function.
Working in overdrive is not only bad your health, but also for your business. Sure, everybody feels stressed at one point in their career, but there’s a difference between feeling tired from a long day of processing invoices and feeling burned out from having to process invoices on a loop (day-in and day-out).
“Employee burnout can trigger a downward spiral in individual and organizational performance.” – Gallup 2018 Report
Decreasing your invoicing time doesn’t have to be wishful thinking. Partnering with a Virtual Accounting Talent provider like Personiv can help you alleviate the challenges that come along with processing invoices while freeing up your time to focus on more important projects. Get in touch with one of our experts to see how we can help you reduce invoicing time.