It is no mystery that companies operating under a subscription management system have to chase after customers month after month in an attempt to streamline their cash flow. Collecting outstanding payments is a major concern for majority of the businesses where they have to send out regular recurring invoices. However, care must be taken to maintain a proper decorum while sending out payment reminders. This is critical for the success of the company and will help to maintain a positive relationship with your customers. Primarily, you will be making use of invoices as a form of communication between you and your clients. Hence, a poorly designed one could be the cause of obstruction in untimely payments.
As an entrepreneur, you need to pay close attention to the invoicing process so that the margin of error remains zero. At times, we may fail to realize of any mistake, but your customers won’t be so forgiving. If they have an aversion to your invoicing practices, it won’t take long for them to take their business to one of your competitors. Don’t let this situation bog you down and take note of the top 5 invoicing mistakes that you should be avoiding.
Ambiguity or unexplained information
Imagine yourself being in a situation where you receive a generic email mentioning that you owe X amount of dollars. It doesn’t say anything about the other details. This will leave you feeling puzzled. The situation can go haywire when you are receiving invoices from multiple companies every month. So here is what you should be doing instead: give a full breakdown of all the charges listed. If there is varying information such as special offers, upgrades or charges for renewal, they should be clearly stated. This will also help the client to keep a track of the deliverables and the payments that have been made.
Not using the right tone
Invoices are an impersonal mode of communication and may fail to connect with customers on a personal level. Being polite and making use of terms such as thank you can go a long way in building a long lasting customer relationship. Similarly, using language such as if you fail to pay up on time, you will be penalized will come off as harsh and is a big No, No!
Fail to follow up
During the billing and invoicing process, nothing hurts a business as bad as overdue payments. If this situation takes a toll, it is very likely to create issues with your accounting books. To combat this problem you need to send out a polite reminder that payment is due. There can be a number of reasons why a customer couldn’t pay up on time. It is important that as a business you keep your cool and understand that perhaps the issue may have occurred due to some financial difficulty.
Issuing generic invoices
When you are creating templates for your invoices, make sure to use the company’s logo and colors to make it look distinctive. This will immediately set you apart from the competitors and as a brand will also give you instant recognition in the eyes of your customers.
Deploy marketing tactics
Many fail to capitalize on this hidden marketing opportunity that companies fail to include on invoices such as discount offers, launch of a new product etc.
A powerful subscription management software can help you overcome these blunders. Its Subscription Analytics and Reporting tools can further improve the overall efficiency of the business. Watch this space for more updates.