While standard applications like Excel and Word can help you create invoices, you also have a higher risk of making mistakes when using them.
Invoice software and small business accounting software helps you streamline your entire invoicing process and avoid these common invoicing mistakes.
- Sending invoices late
If you’re like most small business owners, you probably have a long line of tasks filing your daily to-do list. In fact, some business owners get so busy at times they completely forget to send invoices or send them out late. But if you want your customers to pay you on time, it’s important to send invoices in a timely manner.
When you use accounting software for small businesses like QuickBooks, it gives you the ability to send invoices to your customers automatically. Once you input your customer’s information, you have the option to create recurring invoices for clients. This automatically sends invoices to clients according to the invoicing schedule you design.
- Forgetting to follow up on unpaid invoices
How many times have you forgotten to follow up on a past-due invoice? It’s easy to do when you’re not working with small business accounting software that’s designed to track paid invoices. The good news is, invoicing software helps you follow up on late invoices regularly. It tracks invoices as they’re paid, allowing you to run a report that shows you which invoices are outstanding.
Online invoicing tools also typically let you set up a workflow process that automatically sends payment reminders to your clients when they’ve missed a payment. This makes it easier to collect on unpaid invoices. In most cases, you can set your reminders to go out as soon as the invoice is considered late.
- Not offering a credit card payment option
When you send invoices to your customers using software like Excel or Word, it doesn’t automatically give your clients the option to pay the invoice online by credit card. Of course, you could insert a link to available payment options into your invoice, but when you manually insert information like this into your invoices, it’s really easy to forget.
Invoicing software ensures your available payment options are included on every invoice. Once you link your accounts, you can set up your invoice template with the payment link inserted. This way, it’s included on every single invoice you send.
- Not enabling currency conversion
If you conduct business outside of Singapore, you probably spend quite a bit of time converting currency manually when you reconcile your accounts. Of course, when you work this way, you’re more likely to make a mistake. That’s why it’s important for companies that accept payment in multiple currencies to use an invoicing software that makes currency conversion simple. The best accounting software for small business has:
- Real-time currency conversion rates available
- The ability to automatically convert the currency into Singaporean dollars when it applies the payment to the appropriate account
- The capability to handle multiple foreign currencies
- The ability to reconcile any of your foreign bank accounts
- Not including fees for late payments
A lot of small business owners don’t charge their clients late fees, usually because they’re afraid of losing the client. But here’s the thing: do you really want to work with clients who constantly miss payments?
Chances are, when you send an invoice to a client, you’ve already supplied the client with the products and/or services purchased. You deserve to be paid in a timely manner. In most industries, it’s completely normal to charge late fees — but you need to be upfront with your clients about them. This means you should include a blurb about late fees in your payment terms section. You want to keep your payment terms simple: A short sentence or two that tells your clients when late fees will be charged and how much they are should work just fine.
When you use invoicing software, you can create specific payment terms for your business. Then all you have to do is choose to have your terms displayed on every invoice you send. Once it’s set up, you don’t have to manually insert your payment terms into your invoices.
- Not charging GST on sales
When you use automated invoice software to create customised invoices for your business, it’s possible to set the system up so GST is calculated automatically for each invoice.
To do this, you have to first determine which goods and services are taxable. Then set up your accounting software so it applies the right tax rate for your services. This saves the information in the system. When you create a new invoice, all you have to do is choose the right selection for GST, and it’s automatically calculated and placed on your invoice.
- Using free invoice software with pre-made templates
It’s common for small business owners to use preset invoice templates they find online instead of creating a custom invoice for their business. But there are several reasons that creating a custom invoice template is a better option. With dedicated invoicing software, you can:
- Customise your payment terms
- Itemise your invoice items
- Use your company’s branding
- Offer multiple payment options
- Add short messages to clients
- Offer incentives for paying early on future purchases
Ultimately, using small business accounting software lets you automatically send customised invoices to your clients, which can save time and help you get paid faster. Try QuickBooks free for 30 days.