Invoicing! The reason all entrepreneurs start their businesses (really need a universal sarcasm font). While invoicing sure isn’t sexy, getting your invoices setup correctly from day one will help you get paid in a timely manner which is critical, as cash is king for all startups.
Some straight up facts about invoicing to consider for your startup
- Unpaid or late invoices can seriously shorten your startups runway by months. As most startups have 12-24 months to live, every month counts.
- In addition to the lack of cash hurting your business, time spent collecting is a huge distraction for startups.
- Customers mostly delay paying invoices because they have wrong or incomplete information, they don’t look urgent enough, or they are having financial troubles.
Some straight up invoicing hacks curated from the VENTUREAPP community
- You need a detailed checklist of information that you need for every new account: account name, business address, contact name at business and their contact information, client tax ID #, copies of the clients resale or tax-exempt certificates, contact of the client’s financial institutions depending on what you are selling them, confirmation of their acceptance of your terms of service or warranty.
- Identification numbers are absolutely critical for accounts payable pros to identify your invoice and get it in their system to get paid. Be sure to have a very clear ID system.
- Be sure to provide very clear descriptions of the product/service provided on the invoice. The more information, the less chance of holdup in AP getting confirmation from other people in the business of what they are paying.
- Be very clear about when the payment is due. For example, if payment is due in net 90 days, when does the clock start on net 90? Provide a specific due date and explain all terms on the back of your invoice.
- Be sure to have a specific contact person from your company on your invoices to provide a personal touch and set up and automated touch point with specific contacts at the client every quarter to make sure they are still with the company.
- Consider specific sales tax data on invoices if it applies to your customers.
- Last and most importantly. by automating your billing process with integrated accounting software, you’ll save significant time by killing admin work and improve your reporting.