CodeSpace Academy, a Cape Town-based tech educational institution, has announced that it will be offering free coding courses for learners from Grades 7-12 during…
Many entrepreneurs and small business owners fail to recognise this central fact: invoices represent a crucial second opportunity to make a positive impression on the customer. I say second opportunity because your first opportunity resulted in the sale of your product or service.
In this sense, your company’s invoice is actually an opportunity to reinforce this relationship between your company and your client rather than damage or ignore it.
Additionally, the invoicing process holds significant potential to enhance your enterprise’s efficiency in several ways, not the least of which is improved cash flow. Let me explain.
The importance of having an invoice that conveys a professional appearance cannot be overstated. As I said, the invoice is typically the next point of customer contact—post sale. Understandably, this, like any customer contact, should present the company in the best possible light.
Elements of a professional invoice include its appearance. Beyond appearance, invoices should be informative, correctly describe the transaction, spell out the agreed upon terms, highlight the due date and include any other pertinent information.
A thoughtfully prepared invoice not only supports the professional image you want for your company, it augments cash flow. Clear, concise invoicing eliminates customer calls for clarification. Customers with a clear understanding of their responsibilities are more inclined to pay on-time. Shortening the payment cycle is a key factor in improving cash flow.
Additionally, your staff spends less time responding to increased numbers of questions from customers that will naturally result from a poorly thought out invoice. This allows employees more time to do the productive work necessary to advance your enterprise.
‘I just don’t have the resources’
I hear this all the time from entrepreneurs, startups and small business owners. Believe me, I understand the sentiment. Resources are always at a premium. One of the most precious resources is time. Entrepreneurs and small business owners never seem to have enough hours in the day to accomplish the myriad tasks they must be check-off the to-do list.
While money is an important resource, I think most would agree that time is the paramount resource. Think of it this way; if you run low on money, you can earn more or borrow more. However, if you run out of time there is no way to earn more and it certainly can’t be borrowed.
The role of time management
Making the best use of the 24 hours each of us has in our day is the goal of time management and this applies equally to our personal and professional lives. Effective time management ensures that we spend the no more than the appropriate amount of time completing specific actions.
Another key aspect of time management includes prioritising the tasks needing completion because, failing to properly prioritise tasks could result in additional wasted time.
For example, placing an order for office supplies before conducting an inventory of what is presently in stock. As a result, you run the risk of spending money on unneeded supplies and you don’t get the supplies actually needed. Worse yet, you have to repeat the exercise once you complete the inventory you should have done in the first place, which wastes valuable, dare I say, irreplaceable time.
Time management overlaps all key responsibilities of the busy entrepreneur or small business owner. It is an integral part of effective planning, setting goals, establishing deadlines, delegating responsibilities and prioritising tasks.
What does invoice financing have to do with time management?
More than you may realize! As I stated earlier, clear, concise and professional invoicing addresses a number of time management issues in critical ways.
The invoice can also serve as a marketing tool for the enterprise, lowering costs inherent in the marketing function. Apart from the image boost a professional appearing invoice provides, there are also opportunities to piggy-back sales literature with invoices sent to recipients. This saves the enterprise time and money. The postage cost is being incurred anyway. Why not get more bang for your buck?
Clear and concise invoicing reduces inquiries for clarification. This saves time that would otherwise be spent responding to customers’ questions.
Effective invoicing improves cash flow by shortening the payment cycle. Improved cash flow allows the business to avoid spending valuable time looking for loans and alternative sources of cash to keep the business operational. A business that does not need to borrow will typically enjoy a better bottom line.
A business is much like a fine watch. Its many parts must work in harmony to produce the desired result which, in the example of the watch, is the correct time. In business, the desired result is profit. Purists might argue that the desired result is fulfilling the customer’s need or solving the customer’s problem, but I believe that fulfilling needs and solving problems are the means to the end: profit!
We are agreed that time management is essential to the overall success of any enterprise and that intelligent, professional invoicing plays a critical role. The problem for most startups and small business owners is one of finding adequate resources to establish an effective time management program, much less a sophisticated invoicing platform.
The good news is that a variety of these management tools are available online at no cost.
There is no longer any reason for small business owners, entrepreneurs, start ups and freelancers to struggle with invoicing.
Image by ChristopherTitzer via Flickr