Sometimes our least favourite tasks are the most important ones. And that’s certainly true when it comes to invoicing.
Most small business owners and freelancers dread invoice time but know that good invoicing habits are the best way to keep the cash flow consistent. Do you need help smoothing out your cash flow and getting on top of invoicing?
Eat the frog
Mark Twain famously advised that the first task of the morning should be to eat a live frog. (Because after that, everything else will seem easy when the worst task of the day is done!)
Perhaps Twain was referring to invoice time.
We all know 'doing paperwork’ is never as simple as firing off an invoice. It involves tracking your time, recording all billable items, creating the invoice and chasing up any outstanding invoices. So if you’re struggling to find the best way to accurately track work hours, ensure you get paid on time and figure out how often you should invoice, we've compiled answers to some of the most commonly asked questions about invoicing.
How often should I invoice?
Whether you bill for your time on a project basis, or by the hour most accountants recommend invoicing monthly on the first of the day of the month. There are a few reasons for this: • The fewer invoices, the better. Simple, really. By sending invoices once a month, you have more time to focus on your actual work. You may be tempted to invoice immediately for small, one-off jobs but you’ll need to consider that this all adds up to a lot of invoicing time if you do a lot of this type of work.
• Regulate your cash flow. If you bill on the first of the month, you’re likely to get paid around the end of the month. But if you invoice part way through the month, there’s a chance you may not receive payment until the end of the following month. That’s a long wait till payday.
How do I make time for invoicing?
The experts all agree that making invoicing one of your regular tasks is your best bet for success. If you bill weekly, do your invoicing on the same day each week. If you bill monthly, schedule a date each month when you do the invoicing.
The same goes for following up on unpaid invoices. Set a day of the week or month where you check over outstanding items.
It may seem hard to break your workflow and switch to the invoices, but setting a regular time for invoicing is one of the best ways to reduce stressing out over invoicing.
How do I make sure my invoices are accurate?
Lost billable hours are one of the biggest issues that professionals who bill by the hour face. A simple way to ensure you’re capturing all your billable hours is to record and log your time often. If you are trying to recall what you did on Monday, there’s a good chance you’ll remember things in great detail on Friday. However, if you’re trying to recall the same amount of detail at the end of the month, you’re probably going to miss a few things.
The easiest way to ensure the accuracy of your invoices is to use a time tracker app that does the time management for you.
How do I make sure I’m getting paid for all the work I do?
This is the biggest trap for the mobile workforce. If you’re a freelancer, you may not see the need to charge for small items like a quick phone call. But why not try going through your call log one month and add up all the time you spent on the phone with clients. You may be surprised. Businesses can
Businesses can loose thousands of dollars, sometimes hundreds of thousands, when billable hours are never recorded. This is particularly challenging when multiple employees are working on the same project. Time tracking software is often the solution for collating lost billable items.
How do I invoice while I’m on the road?
Cloud-based accounting software like Xero, Reckon One and Quick Books have revolutionised the way we invoice. Whether you’re on the road, at the airport or in the middle of a call, you can easily create and send invoices on the go.
Did you know?
MicroManager makes it easy to rescue lost billable hours. If time items like phone calls or travel time aren't assigned to a client for invoicing they will show up as a red ‘incomplete’ item. This makes it super easy to capture any lost time items and add them to your client's invoice. Learn more about MicroManager and mobile time tracking software here.