One of the primary things that can put a new company out of business is not the process of just getting customers, it is making sure you get the details right to bill the customer accurately and in a timely fashion. Because at the end of the day you need to get paid on time. Remember, cash is king in a business.
If you have your billing and accounting practices down, you will be able to manage and run your business more efficiently. Efficiency is everything. All companies you admire run on efficiency. Additionally, you will also keep and retain more clients because they will feel the professionalism. Go into any market and look at the successful companies and every last one of them has their professionalism and accounting practices in order. Don't skip this detailed step.
Every Invoice or Receipt Should Include:
- Include Full Client Details - Take the time and get all the relevant client details. Including billing contact, billing address, and PO number if necessary. You may or may not need this information later so get it now. I t is easy to do at the time of sale.
- Customized and Personalized Invoice - Don't use the default template or base invoice. Take the time to customize it with your logo, client account numbers, and details of the service.
Include Product or Service Summary - Make sure to include a detailed description of the service(s) you performed or product(s) you sold them. If it is a product, include all part or model numbers. Make sure the manufacturer is included as well. The receipt should be able to be read by an accountant.
Email Copies - Always, always, always, email your client the invoice or receipt. This not only is useful to them, you can get their email address to use later on for marketing or communication. This is as important as anything.
- Credit Terms - Be ready to discuss credit terms with your client. Always have your preferred terms and then an option you reserve for clients that qualify. Working with larger companies is impossible if you only want to do Due on Receipt or Due on Delivery. They simply can't do that in many situations because they pay hundreds of bills a week. So decide up front what you will offer (Net 15, Net 30, Net 60, etc.). Some research at what your competition does here is time well spent. You will absolutely lose deals if your price is better but the terms are worse. Cash is king to your clients too and bad terms has a fee (cost of capital).
- Have a W9 Ready - Don't wait for a business to ask you for a copy of your W9 form. Make sure to keep an electronic copy filled out and signed at all times. Your bookkeeper or accounting person, which may be you if you are just getting going, will need this often. So having one ready to go speeds up payment. Our bookkeeper keeps one on her phone to send over email whenever needed! If you don't have a W9, you can get one here. Don't delay payment because the client can't set you up as a vendor in their system.
- Certificate of Insurance (COI) - Many companies will ask you for a copy of your COI form before work can commence. Make sure you know who at your insurance company to contact to send this. Then when a client requests one they an fire it off right away.
Following these details will get you started don't the right foot and get paid faster! Focusing on the details does not detract form your core mission and principle, it ensures you mission is successful.