5 tips to manage your small business invoices

As a small business owner, staying on top of your invoices will help you get paid on time and manage your cash flow. Yet, keeping up with invoices can become frustrating if you have clients who aren’t paying on time, especially if you’re dependent on these payments to keep your business solvent.

So, what can you do to help streamline the often tedious invoicing process? Here are 5 ways to manage your invoices more effectively.

1. Choose the right automation software

Managing your invoices manually can be tedious, and potentially costly at scale due to human error. Using a digital platform with automation features is your best option for staying organized, saving time, and getting paid faster at any business size.

Several small business accounting platforms allow you to send and track invoices, as well as accept payments and run profit and loss reports. These include QuickBooks Online, Freshbooks, and Wave. Regardless of which platform you choose, automating your invoicing process will help you ensure all invoices go out on time and monitor your cash flow by tracking payments.

2. Clarify payment expectations with your clients

Regardless of whether you run a sole proprietorship or a business with 100 employees, make sure every new client understands and agrees to your invoicing policies. Discuss both sides’ expectations at the outset, before issuing the first invoice to a new client. Some things to address here include:

• Who should you send the invoice to?
• What are the terms and conditions of your relationship? What amount will you be charging and for what products/services?
• When does your client prefer to receive invoices? When do you expect to be paid—and do you expect payment in a lump sum or in intervals?
• How would you prefer to receive payment, and how would your client prefer to pay?

3. Include details and payment links in your invoices

Even once you’ve discussed payment requirements with your clients, include as much detail as possible in your actual invoices—you’ll likely get paid faster. Here’s what to include on every invoice:

• Your contact information and company logo makes the invoice look more professional and provides a shortcut for clients to resolve any payment issues.
• The invoice amount, broken down by what product or service is being charged for.
• A due date or payment interval dates reinforces your expectations and makes them impossible to ignore.
• A clickable payment link or QR code makes payment easy for your client. Offering multiple payment options—such as ACH, wire transfer, credit card, debit card, and check—reduces barriers to timely payments.

Did you know?

With Bluevine Business Checking, you can easily manage your invoicing and incoming payments, checking balances, and outgoing bill payments in one intuitive platform—no need to juggle multiple banking apps.

4. Send automated reminders for late payments

If you’ve followed the steps above and your invoice still hasn’t been paid by the due date, you’ll need to follow up with your clients. Your automated invoicing software should include the option to schedule automatic reminder emails as due dates approach or pass. Consider attaching a personal note to reminder emails sent after the due date has passed, including a friendly reminder that you haven’t received payment for the completed work.

If your client still isn’t responding to emails, call them or your contact at their company. If you don’t hear back from them, contact their payroll manager (if they have one). Your automated invoicing platform should include payment tracking, so always double-check that your invoice was received and opened before escalating.

5. Plan ahead for future missed payments

Missed payments will happen, but it’s important not to let them become a drain on your business. Be sure to diversify your cash flow streams and keep an emergency cash reserve. Never rely on one client to cover your business costs.

If a client misses a payment, you can request upfront deposits on future purchases or impose late payment penalties if you didn’t have them already. To plan ahead for outstanding invoices, establish your late payments policy in writing when onboarding new clients, and seek legal counsel if a client continues to avoid payment without communicating.