One of the most important parts of not only running but surviving in your business is your invoice, and these invoicing facts are crucial.
Because invoices are so tied to cash flow, and because cash flow is absolutely necessary for maintaining your business by meeting your regular financial obligations, it’s important to know as much as you can about these simple finance documents.
Today we’ll look at some amazing invoicing facts that will help you to boost your business.
A purchase order is not an invoice
Purchase orders are very different from invoices; nonetheless, many business owners still confuse the two.
The most important distinction between the two is that the invoice is made after the purchase order is sent. The purchase order is, as the name implies, an order sent by the buyer to the seller to list the products or services he wishes to purchase.
On the other hand, an invoice is sent by the seller to the supplier after the goods or services have been delivered.
E-invoicing is the future
Electronic invoicing is growing throughout the world, and it is doing so at a compelling speed.
Every year, more and more governments are pushing their citizens to start adopting e-invoicing practices. In fact, the US government is already using e-invoicing for up to 40% of its purchases.
According to the 2012 Global E-Invoicing Study, 73% of respondents claimed to have used e-invoicing in the past.
Even better, the US treasury has estimated switched to using e-invoicing, it could cut costs by up to 50%, saving the US government $450 million.
Invoicing is a time-sensitive matter
Sending out invoices on time is one of the most reasonable invoicing facts there are. If you send out your invoices faster, you will get paid faster.
However, no matter how logical it may be, it is still difficult for business owners to send them out on time. If they are sent late, however, you could miss the accounts payable cycle, meaning you’ll have to wait another 30 days before your invoice gets paid.
Of course, with e-invoicing, you’d be able to submit your invoice much faster, and it would be able to integrate into your client’s AP system.
Politeness will get you a long way
One of the worst parts of being a business owner is that you will need to go after your late payers.
However, although it means you must be persistent in your efforts, that doesn’t mean that you have to be mean or strict in your emails.
In fact, it’s much better to be polite. By using polite language, you can have your invoices paid 5% faster.
But beyond the speed, it is also important to remember that you need to present a professional image and you also have to consider your future cash flow. If you are polite and professional, you can keep your customer for much longer than if you were rude in your emails.
With these invoicing facts, you’ll be sure to see successes in how you handle your invoices. And with that, you’ll have better cash flow and much better business overall.