Proper client billing is not just about financial transactions; it’s an essential part of your business relationships. For accountants, mastering client billing ensures a steady cash flow and increases trust through better transparency.
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Client Billing Guide
Prioritising client relationships through billing
Building strong and enduring client relationships is the cornerstone of a successful business, particularly for accountants. Clients want more than just services. They desire strong and healthy relationships with accountants they can trust.
The way you handle your clients’ money can either strengthen these relationships or put them at risk. This is why managing client expectations goes beyond just the services you provide. You need to provide a safety net through transparent pricing structures, efficient billing, and secure payments.
Contracts are a primary tool for accountants as they provide the foundation for healthy client relationships. They outline the expectations for both parties, including billing amounts and timelines.
Here are some tips for creating a client contract:
- Specify billing details: Clearly state the billing amount, payment frequency, and other financial specifics.
- Include payment terms: Specify when and how payments should be made.
- Define deliverables: Outline the scope of work and what services the client can expect, ensuring transparency and setting expectations from the outset.
- Clarify cancellation and refund policies: In case either party needs to terminate the agreement, having clear policies in place helps to avoid conflicts.
Once you have a contract in place, you can start creating a client ledger for the customer. Then, when it comes time to invoice, you’ll have everything you need for billing.
Learn more about contracts and other important processes in our Resource Centre.
Preparing for invoicing
Preparing for client billing can be the most stressful part. First, you need to figure out what kind of invoice you need.
What invoices do accountants use?
Businesses in Australia can provide two types of invoices, regular invoices or tax invoices. The latter is paid by businesses that are registered for GST.
You need to provide a tax invoice if the purchase is taxable, the purchase is more than $82.50, or the customer asks for a tax invoice. If the customer requests a tax invoice and you’re not registered for GST, you can provide a regular invoice and show there’s no GST included in the price.
Creating invoice templates
Creating invoices for each client is time-consuming, so having a template makes the process more efficient. They streamline the billing process and give your business a consistent, professional look.
Your invoice template needs to include the following:
- Business information: You must feature your business name, contact information, and Australian Business Number (ABN) if applicable.
- Client details: Clearly state your client’s name, address, and any other information required to specify the recipient.
- Service description: Provide a breakdown of the specific services or products you’re billing for, including their respective quantities and prices.
- Billing rate: Specify the billing rate. You can break this down into different rates for various tasks.
- Payment terms: Clearly outline the payment terms, such as the due date and late payment fees.
- Invoice number: Each invoice should have a unique identifier for tracking purposes. When it comes to the end of financial year (EOFY), these numbers are extremely helpful.
Instead of creating a template from scratch, you can use our free invoice template.
As you start to prepare for client billing, you’ll need access to the client ledger. QuickBooks Online Accountant (QBOA) is one way to stay on top of it all, even accessing the financial information of clients who don’t have QuickBooks.
Accepting different payment options
The last thing you want is for your clients to face hurdles when it comes to making payments. The more convenient the process, the happier your clients will be. Part of this includes accepting various forms of payment.
This may include credit card, PayPal, and bank account transfers, among others.
Sending your invoice
You have multiple options when it comes time to send your invoice. According to ATO guidelines, you can send your invoice by:
- Post
- Printable web page
- In person
- E-invoicing
Whatever method you use, it’s important to send the invoice by the agreed-upon timeframe. If you work with a client on a regular basis, it’s a good idea to send invoices at the same time to ensure your customer knows when to expect them.
Keeping records
By law, you must keep all business records, including invoices, for at least five years. You can do this with printed records or digital ones.
Keeping invoices is not only essential for legal compliance, but it will also help you prepare for your business activity statement (BAS), income tax return, and more.
Using invoicing software
Invoicing software can be a game-changer for accountants and bookkeepers. It helps you with efficiency, professionalism, accuracy, organisation, and quicker payments. Each software platform is different, but you should look for features like customisable templates, multiple payment methods, and easy expense tracking.
QuickBooks Workflow Billing can give you the support you need for client billing, alongside other important things like managing payday.
Following up on missed payments
Late payments can be a recurring headache for accountants. You can try to avoid them as much as possible by maintaining consistency and professionalism in your billing practices.
Clear communication can emphasise the importance of timely payments, so make sure you set expectations early with your clients. Your contract should also outline the consequences for late payments, including late fees.
In your pursuit of efficient invoicing and collection, these proactive steps will help you prevent or effectively address late payments.
Streamline your process with QuickBooks
The steps outlined in this guide should help you deal with the process of billing from start to finish. The only thing left to do is use QuickBooks! With everything you need located in the QuickBooks suite, client billing becomes quicker and easier than ever.
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