Many field service businesses must manage their own invoicing, but many view the task as a chore. This could explain why the average business takes a week to send an invoice – and for some businesses, up to two months.
But, while it may be a pain in the neck, prompt and efficient invoicing is vital to keep running a business smoothly and successfully.
According to research by accounting software provider Xero, small businesses are paid, on average, two weeks late. A recent UK survey found an even longer delay of 21 days!
You can speed things up, though. From tightening payment terms, to being hot on chasing invoices, to simply getting your invoices out faster – these are just a few of many examples you can use to help keep the cash coming in.
So, avoid the dreaded cash crunch that spells the end for many field service businesses with these five tips for better – and faster – invoicing.
1. Automate the process
If you haven’t done it already, set up software to automate your invoices. Find a job management system or accounting platform that includes invoicing capabilities, or use a combination of both.
2. Ensure all the work you do is invoiced
Job management software is again useful here, particularly if you have many field engineers working on various sites. With a job management system, you can see the real-time status of every job, and invoice each one as soon as it’s complete.
3. Send written quotes ahead of time
Manage your customers’ expectations by sending them a quote in writing before you deliver the service you’re offering them – including the estimated cost of the job, how you accept payment, and your payment terms. A written quote is different from an estimate in that it’s legally binding.
Make sure they agree to your terms in writing before you accept the order.
4. Set short payment terms
When you send a customer an invoice, specify the timeframe for payment. The standard is typically 30 days or less, but you can choose any amount of time. Xero recommends setting payment terms at no more than 13 days if you want to really get paid within a month.
5. Use a mobile payment system
If possible, allow customers to pay on the spot with a mobile payment system. You are more likely to get paid when the job is fresh in their mind and you are standing in front of them.