Billing and invoicing practices that cause business problems
Invoicing & Payments

Billing and invoicing practices that cause business problems

Irene Kalesi
Irene Kalesi

For most freelancers and small business owners, invoicing and billing are not the favorite parts of their business. It is a burden and can bring about business problems. For example, if a client is not punctual or if you, the business owner, have not do follow the right business practices. Of course, you need to devote time and energy to create the most optimal invoicing process, find the fastest billing methods as well as assemble the most advantageous payment terms. Fortunately, we have already gone through the above topics so you can read the respective blog posts to learn more.

In this post, we will focus on what certain business practices communicate about your intentions to your clients. Your invoicing and billing practices give a certain impression to your collaborators and clients. Unfortunately, it is particularly difficult to change that impression, especially if it is a negative one. If you are careless about details and deadlines, do not presume that your clients will be punctual and detail attentive. Strong business relations bring referrals, while unpolished ones do not carry much success.

8 business practices to leave behind

Your business practices have stories to tell about the way you organize your invoicing and billing process. We will analyze some of those behaviors so that you can find the ones that describe you and change them to avoid any business problems in the future.

No well-structured agreement: You are too trusting or an early beginner (or both).

Having an agreement, preferably put together with a legal advisor, is essential in today’s business market. It protects your rights and work as well as your client’s project and final deliverables. The absence of a contract shows that your clients can take advantage of you since you do not protect your interests. Regardless if you are a new freelancer or an experienced pro, you always need to sign a contract to secure getting paid and be protected by law under any circumstances.

No use of invoicing software: You are not tech-savvy or still a novice.

Bad invoicing and billing practices are mostly aftereffects of the lack of trusted invoicing software to organize your finances. In today’s business world, it is pretty uncommon to find professionals operating without invoicing software. Manual formation of invoices, cash payments, and invoices sent via post are business techniques belonging to previous decades. Therefore, invoicing automation and fast billing methods streamline your business, build your integrity, and advertise your work. Automatic reminders and invoicing smart features can actually save your ventures, put your projects in order, and strengthen your client relations.

So, if you are not familiar with online invoicing platforms, there are step-by-step guides on how to use them and a customer support center to help you out if you get stuck. Furthermore, if you are a new freelancer, the assistance of invoicing software can be indescribable since it can teach you how to operate your business.

Billing your clients in delay: You are not concerned about the “if” and “when” you get paid.

This might be one of the most absurd things that a professional may do. Each time that you forget to bill your work,  you communicate that you do not focus enough on getting the appropriate remuneration for the time and effort spent on your client’s project. At the same time, this move (or its absence to be exact) gives a negative careless impression of you, and this can have repercussions on your cash flow and your reputation in your business circle. Lack of punctuality gives bad payers the window of opportunity to delay or even “forget” their payments towards you. If you use invoicing software, be sure to set a specific date for an invoice to be sent. This way, you will be reminded that you should bill your clients on time.

No follow-up on outstanding invoices: You do not particularly care about when you get paid.

Let us say that you have sent out your invoice on time. But is that the last thing you do? The answer is no. Not showing any sign of attentiveness is never beneficial for your business. Clients that do not receive any emails or phone calls regarding the settlement of their debt will continue to be late and bad payers. The lack of emails about any overdue invoices works as an excuse for your clients, especially if you never receive payment and resort to legal action. They will be able to answer your lawyer “They never contacted me about paying after the first initial invoice email”. Unfortunately, they will not be lying.

Hopefully, you will be able to fall back on the agreement you had signed before you started working on the project. However, being considerate about the payment process will exorcise business problems and save you a lot of time, and money in the long run.

Too many follow-ups: You desperately need to get paid.

Do not take things to extremes, since the results are never desirable. In this case, you, as a professional, abuse your right to ask when your client will pay you. This repeated action can be irritating to your clients, showing them how low your business confidence is and how you do not trust them at all. You do not want your clients paying your invoices to get rid of you or even never paying you due to your annoying communication. So, it is a better idea to ask politely for a payment according to a well-thought schedule and not repetitively.

You ask to be paid upfront: You do not trust your clientele.

This is not a particularly common billing practice. It mostly applies to large projects and expensive invoices. A full payment upfront shows that you have to feel financially secure before diving into a months-long project. Not all clients accept this kind of payment since it shows a lack of trust on your part. A more toned-down alternative would be to ask for an advance payment. They will be more likely to agree on a payment term like this.

If you are not sure about collaborating with a client, feel free to do a background check. Or ask around to learn more about their credit in the business market.

Wrong invoices, wrong emails, wrong clients: You need discipline and a complete reorganization of your business.

This is maybe the invoicing and billing practice that can have the most profound impact on your professional development. Not being careful with the information you put in an invoice, sending that invoice to the wrong email, and thus the wrong client is professionally damaging. We do not imply that one or two mistakes can harm you. However, if these cases are getting more and more frequent, you might want to reconsider your business practices so far. You should also start working more closely on your business logistics to eradicate the carelessness that creates business problems.

Addition of new extra fees out of the blue: You do not honor the existing agreement

Charging your clients extra money without prior notice is unprofessional. In a scenario where you have done some additional work and you need to get paid for that; you have to discuss the matter with your client first. Otherwise, when you bill them with any unexpected fees and costs, they will be alarmed, to say the least. Forming and adhering to a well-arranged agreement will speak volumes of your professional integrity.

All the negative invoicing and billing practices we have discussed in this blog post should be changed especially If your goal is to achieve enhanced financial management without any business problems constantly emerging. Your mistakes can prove detrimental to your revenue and your business welfare. Therefore, think twice about reiterating them in the future.