If you are a business owner, you are aware of how important your cash flow is for your survival. When you do work for someone, at the very least, you hope they will pay you on time or as close to on time as possible. This often does not happen and businesses can be left to chase their clients for money owed. It can be a bit of a vicious circle as many clients will state the reason for their failure to pay as the fact that they have not been paid by their client. It can be a very difficult issue for businesses to manage and as a business, it makes sense to have a surplus of money. There is no guarantee that you will be paid by the due date.
Timing is important when you are sending invoices and there is no absolute hard and fast rule to doing this; it is not a one-size-fits-all application.
If your business is one where there’s a lot of upfront cost involved in order to fulfill an order, you may want to invoice ahead of you starting the work. Send an invoice asking your client for part of the payment to be paid up front with the remainder to be paid on completion. This will ensure that if the client were to change their mind halfway through the job, at least your costs would be covered.
Companies are often concerned about their professionalism and will wonder whether it is appropriate to send out invoices immediately after completion or whether it is more appropriate to wait a few days before doing that. The problem with waiting too long is that your client could easily forget that the work has been completed, as it is no longer fresh in his / her mind. Send the invoice when the memory is there; confusion can happen if you wait too long. If you are in the business of offering modifications to your work, wait until your client is fully satisfied. Otherwise, they may feel that they have paid for a job which has not been completed properly.
As for the day of the week to send an invoice, many businesses wonder whether to send their invoice at the start of the week or the end of the week, or the start of the month or at the end of the month.There has been research conducted into this question, but sometimes the best solution is to speak to your client from whom you can gain an understanding of how their particular business operates. Ask for their preference as to when they would wish to receive their invoice; this can be particularly important if you are planning to have a long-term relationship with a client. The client will then feel that you are working to accommodate them.
Guidelines are important. Set your expectations for payment right from the start, otherwise it may become a bit embarrassing if you have to send repeated invoices time after time.
