7 Expert Invoicing Tips That Can Help You Get Paid Faster

Nov 28, 2023 by Zazil Martinez

Gear up for year-end by accelerating your invoice payments. Go digital with electronic invoices, automate collections, and offer early payment perks. Save time and improve cash flow with these expert tips.

The end-of-year close is approaching, so it's time to catch up on those late receivables. Following up on overdue invoices and updating accounts is essential no matter what your company sells.

However, chasing late payments can be frustrating. Having a plan before a payment is late is crucial, especially for customers who fall behind frequently.

Thankfully, there are some simple ways to get invoices paid faster. We compiled a list of tips that have helped our customers so you can do the same.

 

1. Chose Electronic Invoices


Sending invoices through traditional mail doesn't speed up payment; it takes longer, risks loss, and adds costs to collections. You can quickly solve all these challenges by invoicing your customers electronically. By using electronic invoices, you can reduce processing costs by 81% and get paid 77% faster.

 

2. Automate Customer Collection Plans


Financial teams often send reminders to customers to encourage payment of unpaid invoices. Our power users approach late payments very differently. Instead of waiting for accounts to become overdue, they proactively put all their customers on automated collection plans. These plans clearly outline the steps to take when there is a slight indication that a customer may pay late.

When do you send the invoice? When does a reminder get sent? How often do you think you should follow up by email or phone? Automated collection plans are great because they ensure you won't have to review an account and wonder what to do next.

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3. Digitize Your Receivables ASAP


When it comes to faster payment times, digital AR software is vital. You can use it to make and change receivables and easily record essential data. Your team can track it and see related payments or messages in one place. A better view helps you find problems that may make your invoices unnoticed, unprocessed, or unpaid.

 

4. Set Up Early Payment Incentives


A common way to get invoices paid faster is to offer customers discounts for paying early. This works exceptionally well if you use net-30 terms. Customers usually receive a 2-5% discount for paying invoices immediately. However, a 5% discount may not be ideal for collecting larger sums of money. Fortunately, there are other ways to encourage early payments. You may need to think outside the box.

  • Customers who sign up for auto-pay or recurring billing receive special advantages and save money.
  • Get your sales team's help by offering bonuses or delaying commission until payment. This makes your sales team a collections partner, not an adversary.
  • You can incentivize customers to reduce their DSO by extending payment terms.
  • Reward your collections staff with individual bonuses for improving their assigned accounts. Increase the incentive if the entire team achieves its goals.

 

5. Maintain Customer Communication


Regularly keeping in touch with customers is an underrated shortcut to faster collections. After helping more than 120,000 businesses make payments, we have found that often, when customers have not paid an invoice, they forget about it. A simple gesture can be the gentle nudge people need to get a payment on its way.

To ensure your invoices aren't ignored, meet your customer's expectations, even if they're not stated in the agreement. When you communicate regularly with your customers, they become more interested in paying you on time. Best of all, you can automate these communications using cloud solutions like Paystand.

 

6. Send Pre-Invoice Reminders


To get paid faster, send customers a friendly reminder email before sending them an invoice. This gives them time to prepare their payments if they’re prone to forgetfulness or fall behind schedule. Ideally, you want to send this about a week before you send them an invoice. To be polite, it's better to give them a warning instead of asking about the unpaid bill. To make it easier, ask if they're satisfied with the product/service and if payment is on track.

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7. Use Alerts to Automate Collections


Alerts are helpful tools that can simplify your AR processes and save time by automating repetitive tasks. Create "if/then" scenarios for tasks such as following up on late payments or transferring funds between accounts. This will help you save time and focus on more important tasks instead of moving work through your pipeline.

  • Handoffs. Manually approving one task and starting the next can add delays and bottlenecks to the AR process. How many hours could you save monthly if a form field automatically triggers the handoff?
  • Status Updates. Once payment has been received, there's no reason you should have to update the invoice status in your ERP system. How much time would you save if your system automatically updated and communicated completed tasks? How much faster could your monthly close happen?
  • Reminders. If you're a business with a handful of high-paying customers, sending communications or updates is extremely fast. However, automating reminders for approaching or past due dates can save much time for most businesses.

Here is just a sample list of tasks you can quickly automate:

  • Preparing and sending invoices
  • Adding payment links to invoices and emails
  • Writing and sending pre-invoice reminders
  • Accepting payments from customers
  • Tracking payment settlement
  • Verifying customers have made a payment
  • Sending late payment reminders
  • Setting routinely late customers on collection plans
  • Reconciling payments
  • Sending payment receipts
  • Running financial reports

It's crucial that your software can send the invoice and accept payment from your client automatically. This lets you and your customer focus on work instead of sending and paying invoices.

Investing in Invoicing Pays Off


Collections are a vital part of your larger AR management strategy. Instead of approaching invoicing as a task, imagine it as the entry point into faster payment and healthier cash flow. Overall, investing in AR automation software will improve your ROI. By improving each step of the payment process, you can stop chasing late payments and concentrate on growing your business.

To implement some of these learnings, read our free eBook, The Controller's Guide to B2B Payment Optimization. If you found this article helpful, this short read will help you accelerate collections and save 30+ hours per month.

If you want to reduce overhead costs, eliminate transaction fees, and streamline collections, book a free demo with one of our experts today.