How I Spend 3x Less Time on Invoicing by Automating Tedious Tasks

Margo Ovsiienko Margo Ovsiienko 2021-10-07
invoicing simple

Dealing with paperwork is a significant part of running any business. Invoicing seems time-consuming and unmanageable – that’s what I felt when starting my small business and generating a few invoices every month.

It got even worth when my client base started to grow making me to reconsider using a Word document to draft client invoices and an Excel sheet to record transactions. Automating everything around paper work in my small company became a necessity – keeping in mind I didn’t have any employees to help me out with this repetitive task.

When moving my invoices online, I diid a serious work on analyzing the automation workflows to reduce my engagement with invoicing to its minumum. In this article I want to share with you some simple and more advanced tips on how you can cut down time you spend on invoicing using technology.

Please mind – I am not planning to promote any of the tools available on the market, just give you an idea on how you can use invoicing technology to create automation workflows, so you can free up more time on a strategic task of growing your small business. Shall we start?

1. Set up payment reminders

Tired of chasing clients who don’t pay for invoices? Who wouldn’t! There is good news – you can reduce uncomfortable conversations with them to a minimum by setting up automatic payment reminders.

Don't wait until your customer completely forgets to pay you for services rendered. Create a message template – one or two sentences will do the job! Remember to stay neutral in your words. Don’t be harsh and, at the same time, make your point by letting the customer know that their payment is overdue. When you make a small research on invoicing tools, you will see that a big number of them offer to send such reminders for overdue invoices – 1,3,5,10 (or custom) number of days after your invoice passes the deadline.

Not sure if you have to ping clients with automatic reminders? Then remember that coincidences also happen and, sometimes, your clients lose or forget about your invoice. They will appreciate it if you send a friendly reminder.

When I was considering automating such messages, it was important for me to avoid the stress coming from awkward conversations over unpaid invoices. Hopefully, it will help make your life easier as well!

2. Keep your invoices in one place

Keeping flawless bookkeeping in a company is one of the hardest, but also most important challenges to deal with while running a business. Electronic invoicing has a big impact on keeping your paperwork in order – especially if you have to share your invoices with an accountant who help deal with paperwork.

Keeping your invoices in online folders can get out of control – you can lose your invoices or delete an invoice folder by mistake. With online invoicing, you'll gather them all in one place.

Let’s see why keeping your invoices in one place is so useful.

  • It saves time on searching for a particular invoice.

  • It saves money on printing - you don't always need a paper version of the document.

  • You have access to your invoices no matter where you are, all you need is a mobile phone or a computer with Internet access.

3. Set up recurring invoices

By sending recurring invoices, your customers will always know when to expect an invoice and never miss their payment deadline. When issuing invoices manually, it's easy to forget to send them on time that can cause a delay in payment.

That’s why, for recurring invoices, invoicing software is particularly useful. Also, this function is especially important to the businesses that send similar invoices every month – for example, if you offer your services as a retainer.

4. Connect automatic payments

Maximize your chances of getting paid faster with automatic payments. Some invoicing tools integrate with major payment providers such as Stripe and Paypal. They enable their users to generate invoices with a “Pay Now!” button.

As a result, clients who receive an invoice can pay with a click of a mouse. It’s also up to you what payment option you choose. Also, you can ask your clients about their preferred payment method and enable it on your invoices.

5. Send invoices by email

Creating and sending invoices manually is time-consuming, especially if you issue a lot of documents. Fortunately, invoicing tools allow you to send invoices to your customer by email, straight from an account.

When sending your invoices by email, you can prepare a default message that will be followed with the information about an invoice such as invoice number, date due, and more. All you have to do is enter the client’s email address and send the message. Additionally, many programs allow you to immediately send the invoice in a PDF format or add other attachments.

I have also discovered that some invoicing technology help you define customer variables, so you can modify your message to include some additional information to your email templates. For example, by adding a variable, you can link all unpaid invoices to remind a client about them. While it can be too advanced for some, invoicing tools usually suggest a list of variables you can copy-paste – no tech knowledge would be needed.

6. Use API integration

API is an interface that allows two or more applications to integrate without human intervention. API integrations greatly enhance the functionality of the applications that are involved in the integration and the exchange of data.

Even when logging into a system, for example through Google or Facebook, an API integration is also needed. After all, you are not logging exactly into these services, and the APIs of these platforms are used to authenticate who is logging in. When using an API of your chosen invoicing application, you can easily integrate invoicing functions with your own internal tool – for example, with your SaaS application or other product built for in-house bookkeeping.

7. Check invoice status

By automating the entire invoicing process, you can also easily track payment statuses - check whether your client has paid the invoice in full, in part, or haven’t paid it yet.

Instead of wasting time checking your company bank accounts to see if individual payments have arrived, most major invoicing software tools will automatically notify you if invoices are overdue. This helps you assess if you should already be worrying and urging clients to pay their bills.

8. Send similar invoices

Do you send similar or even identical invoices to your customers? Take advantage of the possibility to create similar invoices. It will keep all the previously entered data while updating numbering and dates.

You can always change mismatched details in just a few clicks, while maintaining the base invoice format. Do you want to send an identical invoice, but need to change its appearance? With available invoicing solutions, you can change your invoice templates with a single click!

9. Add your accountant (and team members)

If you outsource accounting, treat your accountant as a part of your team. At some point of the accounting year, accountants would ask you to send all invoices (including the ones on expenses), and other business related information.

When I had to do it for the first time, finding invoices was difficult, not mentioning recalling all expenses. Filing everything the accountant asked was overwhelming. However, it shouldn’t have been if I had shared everything with him in real time.

When using technology, you can invite team members and your accountant to the system, so they can find the documents in one place.

Here are some other benefits of sharing invoices with an accountant using technology that I have experienced:

  • significant reduction of time spent on contacting them;

  • tracking what tasks have already been done;

  • spending x3 less time on preparing documents by the end of the year;

  • tracking changes history to documents.

What are the most common types of invoices?

As you begin issuing documents using an external tool helping you automate invoicing, it's also worth considering what invoice types are most necessary and suitable to the services you provide. This way, you won’t have doubts about what document your next clients needs from you and what the requirement are for its template.

Fortunately, invoicing tools offer invoice templates that already include the necessary information – you just have to pick the right document type. That’s why let’s have a brief overview of the documents.

The most common types of invoices include:

VAT invoice

It documents a sale of goods or services between one VAT taxpayer to another VAT-registered company. It should be issued in two copies – one for the buyer and one for the seller. These invoices often contain more information (beyond the basic information) than other standard invoices – for example, information about the VAT registration number.

Proforma invoice

As a proforma invoice is not counted as a sales document, there is no obligation to pay it. It can be considered a preliminary, supporting invoice, sent to the customer before services are rendered, when the business relationship between you and your client is not yet fully established. It is used to determine the value of the products offered, to obligate the supplier to ship the product to the customer, or to inform the customer of the price of future transactions. It contains the main details of the goods, as well as, for example, shipping costs.

Recurring invoice

The use of this type of invoice is to regularly charge the same customer the same amounts over a period of time. They are most commonly used for subscription-based businesses or those offering specific services with a monthly or annual fee.

Commercial Invoice

This type of invoice is issued when you sell products globally. It helps get the package you’re sending to go through customs clearance and impose the appropriate taxes or duties, so you can avoid delays in getting your package arriving on time. In addition to the basic information, it can mention the country of origin and destination or weight and volume of the product.

Final invoice

Unlike a proforma invoice, this type of invoice is not just for information purposes, but is also a request for payment. A final invoice is issued at the end of a project to settle previously received advances or prepayments and settle the remaining receivables of the total amount. It indicates that no more additional invoices will be sent.

Credit invoice

Credit invoice is issued when you need to correct an error in an invoice and give the customer a refund or discount on future purchases due to, for example, your mistake. Therefore, it contains a negative amount to be paid to 'reverse' the previously issued incorrect amount.

Debit invoice

It is also used to correct transactions, but compared to a credit invoice, here the matter is about receiving additional charges to your account if the customer owes you money. The amounts on this type of invoice are recorded as positive numbers.

Conclusions

Automating invoicing with the technology will help you speed up the whole invoicing process, seamlessly change invoice types, save you time, and get paid faster. It took me some time to discover and master the tips that I have just shared. However, your learning curve can be much steeper than mine and you can optimize invoicing much faster if you start implementing this tips today. Enjoy the convenience of new technologies and good luck with automating your invoicing!




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