Demystifying common invoicing myths (and why entrepreneurs easily believe them)
Invoices are an unavoidable aspect of business management. Regardless of industry or expertise, every entrepreneur has to undertake the task of drawing up, sending out, and organizing invoices.
But these documents have racked up some common misconceptions over the years—many of which can make invoice management much harder than it needs to be.
As busy professionals, it’s important to find the most efficient ways to tackle everyday tasks. In this post, we’ll take a look at some of the most common invoicing myths circulating in the business world and discuss how they arose in the first place. Stick around for helpful solutions at the end!
Your business can’t control late or unpaid invoices
An astonishing amount of businesses at every level are regularly plagued by late and unpaid invoices. But while this can be seen as a somewhat normal and expected part of the invoice process, it doesn’t have to be. In fact, there are ways to alter your invoices specifically in order to prevent this from occurring.
- Offering a small discount for early/timely payments
- Sending out invoices promptly
- Adding a penalty fee for late payments
- Offering multiple payment portal options (PayPal, cryptocurrency, Apple Pay, etc.)
Tweaking the payment terms and conditions of your invoices can make a huge difference to the speed at which clients pay you. The myth that you can’t control latent invoices only exists because there is a general lack of education about how to properly utilize invoices and design them to promote prompt payment.
Your business is too small to need electronic invoicing
One of the most common invoicing myths is that you don’t need a robust invoicing system unless you belong to a big company. But this couldn’t be further from the truth.
No business is too small to use an efficient electronic invoicing system. Many of these platforms are free and can provide both big and small organizations with the structure and tools necessary for running a successful business. In fact, the smaller your business, the more you could benefit from electronic invoicing.
Invoice creation, editing, storing, and sending out invoices are all automated, leaving you and your business more time to focus on other priorities.
So, if electronic invoicing systems are so beneficial, why does the myth about them being non-essential for small businesses exist? Well, largely because these types of systems are still relatively new to the market, and people can be resistant to change.
Additionally, small businesses are often still developing their client base, adding less demand for a streamlined payment process. But the more optimized your invoice process is, the faster and more effectively your business can gain momentum.
You can’t boost customer loyalty with invoices
Another common misconception about invoices is that they can’t contribute to customer loyalty. However, when utilized in the right way, they can actually be powerful tools for fostering better relationships with clients and encourage people to want to do business with you again.
This can be accomplished by doing the following:
- Add a “thank you for your business” comment at the end of invoices
- Offer discounts for early payments or bulk orders
- Use client’s full names to show interest and respect
Paying attention to these little details can make all the difference to how a client perceives your business. The easier, smoother, and more pleasant you make your invoice experience, the more likely a customer is to want to maintain a professional relationship with you.
The reason why there is a misconception about the loyalty potential for invoices is that invoices used to be strictly operational documents. In the past, customer loyalty was for marketing, not invoices. But times have changed now and we must change with them.
Invoices are not marketing tools
And finally, perhaps the most unfortunate invoice myth of all. Invoices cannot be utilized as marketing tools. These ubiquitous files get sent around constantly, and yet most businesses fail to recognize their potential for spreading brand awareness and promoting their goods or services.
Small adjustments like adding your social media handles, inserting a high quality logo, and even mentioning brand partnerships can all yield positive marketing results for your business.
Entrepreneurs have been largely blind to invoice documents’ marketing potential due to old-fashioned associations about what an invoice really is. Instead of looking at it as a boring document, view it as an opportunity to showcase your brand and what it’s all about.
What are your invoicing options?
When you know everything that an invoice can offer, it becomes something useful beyond just bank deposits and financial records. But knowing which kind of invoicing system to use can be a challenge.
Over the past decade, there’s been a global shift from manual invoicing to digital and electronic alternatives. This is due to a variety of reasons, including method efficiency, accessibility, and environmental sustainability. Let’s get acquainted with the top three options:
- Manual invoicing – Paper, pens, and a calculator were the original invoice processing It’s still in use today, but can be very resource consuming and error-prone.
- Digital invoicing – Digital invoices are invoices that have been created on a digital platform and turned into a digital file, such as a PDF. You can make your own digital invoices in apps like MS Word or Google Docs. Because they require no physical resources, these are more sustainable.
- Electronic invoicing – Electronic invoicing is the height of invoice efficiency. It involves using an automated software program which intelligently creates, stores, and sends out error-free invoices to clients. It’s also a more sustainable option.
In terms of current relevancy, level of efficiency, and eco-friendliness, electronic invoicing is by far the best option out there. And as it gains popularity, it only becomes more accessible and affordable so that entrepreneurs from just about every level can utilize it.
Summary
Finding ways to curb the common problems surrounding invoices is beneficial on multiple levels. Not only does it mean your administrative responsibilities can lessen, but it also means you can start to use invoices as a tool that accomplishes more than just a bank transaction.
