Billing is an expected burden for companies. When promoting to different companies, credit check requirements and invoices are part of the package. This means that even a simple product or service offering can be complicated by the creation, submission, and filing of invoices. However, there are several common errors and problems that can occur during the billing process. Below are some of the most common billing issues and the right ways to avoid or resolve them.
Common Billing Problems for Small Businesses
- Having incorrect contact information or address
- Preparing to send invoices
- Failure to acknowledge receipt of invoices
- Errors in the bill
- Forgetting key elements of the bill
- Lack of follow-up before billing
- Complicated billing process
- Including hidden pricing
- Invoicing prior to receipt of invoices
- Failure to meet payment deadlines
Top 5 Billing Issues and Their Solutions
1. Missing Invoices
If an invoice does not reach the person who is supposed to receive it, you will not receive your commission. In addition, if you use the 30 sentences of the internet to pay a potential client and do not automatically receive a validated receipt, it may take a month or more before you realize your invoice is missing. Not only does this have a significant impact on your cash flow, but it also means you will have to start billing again.
To avoid this problem, not only should you regularly mail invoices or send them to the appropriate specific person in the buyer’s accounts payable department, but also use financial software like an online invoice maker that alerts you when an invoice has been opened and reviewed. Always verify that the correct email address is on file in each buyer’s account and that there are no “unreviewed” invoices. This is a sign that they are not received or reviewed. Look for an automated system that can be set up to notify and alert you if an invoice has not been reviewed for a period of time.
2. Complex invoices
While the wording of an invoice may be clear enough to you (we did X amount of work and exchanged it for X amount of {dollars}), your potential client may have a unique perspective on this information. This can introduce some confusion into the billing process. This can be especially problematic if you are selling completely different services or goods to the same customer and charging completely different amounts.
To avoid this problem, you should define the billing language and format as clearly as possible and use a purchase order (PO), quote, or other documents for instructions. Making invoices as clear as possible will make the approval process easier because each accounting department and approver will know exactly what is being paid.
3. Lack of knowledge
In order for invoices to be paid on time, their content must be accurate. If a potential customer has to be able to process an invoice with insufficient information with an online invoice maker, your rates may go up until someone notices the problem.
That’s why it’s important to keep your information up to date, and implementing an enterprise resource planning (ERP) system that ties it all together can help. An automated system should be able to report many of these items. You can also manually assess whether all the fields are populated with logical and relevant information. In either case, you need to do a thorough assessment of your billing knowledge before you hit “submit.”
4. Billing Errors
Mistakes happen. The panelist forgets to itemize the services rendered, or you don’t realize that the client wants the purchase order printed on the invoice in a specific way. You charge twice as much for a similar service or product, or you forget a comma and a $1,000 service turns into a $10,000 commitment.
By using an automated currency platform, you can reduce or eliminate billing errors. The platform does the billing for you, notifies you when different types of fields are open and takes into account specific customer needs, such as the number of orders required.
5. Common Billing Errors
As mentioned earlier, various omissions such as incorrect pricing, inaccurate calculations, and missing billing dates can lead to billing delays that companies cannot afford. When such errors are repeated over and over again, they can lead to buyer distrust. When financial representatives spend time resolving the problem, determining how many cycles were affected, calculating the necessary changes, and ensuring it won’t happen again, they end up wasting even more of the consumer’s time. Even unintentional mistakes can hurt your communication and lose you a customer.
To stop repetitive errors, you need to address the root cause. A one-time fix will only eat up everyone’s time. For example, if your automated system is getting pricing information from a database that hasn’t been updated in six months, stop billing until the database is updated. Also, if manual invoices are subject to calculation errors, double-check them before sending them out. The time spent on this task is worth it when you receive prompt payment from your customers.
Conclusion
If you’ve made any of the billing mistakes mentioned in this article, think about how seemingly minor errors can affect your cash flow and your line of work. More importantly, think about how they can negatively impact your relationships with your customers. The tips given here will help you avoid many of these problems, strengthen your relationships with your buyers, and manage your team with more impact.
