Just when you started to think invoicing couldn't be much more complex, you now have to figure out when to invoice your clients. When sending out an invoice to a client, there are several factors to consider. On the one hand, you may like to invoice your clients as soon as the task is completed in order to get paid quickly and maintain your payroll strategy on track. But what if the project needs you to receive payment from your client upfront?
Invoicing presents a variety of challenges. So, when should you invoice—either before or after the task? Keep reading to figure it out!
What exactly is it about, Invoice?
You've probably heard the term "invoice" before, but what really is it? An invoice is a document that lists the items or services that a business provides as well as their prices. This documentation also functions as a payment request to the customer.
Invoicing can be carried out using a variety of methods, including manually, online, and through an online payment system. If you're just getting started, you might be wondering when it's appropriate to invoice your clients.
There are several important things to consider when choosing the optimal time to invoice clients.
- Terms of Payment
- Payment Timeframe
- Job Classification
Terms of Payment
The first thing to think about is your payment arrangements. Your payment terms are the conditions under which you anticipate receiving payment from your customer. Will they, for example, get paid promptly upon receipt of the invoice? Or do you offer them a grace period of X days?
Payment Timeframe
You should also consider when you will require the funds. For example, do you require immediate payment to cover the cost of goods or supplies? Or are you willing to wait a few weeks, if not a month?
Job Classification
Another factor to think about is the nature of your work. Is it, for example, a one-time project or an ongoing task? If the project is one-time, it may make more sense to invoice your customer once the work has been completed. If the task is continuous, you may wish to send invoices on a regular basis (e.g., monthly) to keep track of your cash flow.
Invoice After Job Completion
The most typical approach used by companies and organizations is to send an invoice when the task is completed. This is because most customers anticipate paying after the task is completed, just as they do after buying a meal or receiving the things they purchased from the shop.
Here are the options for invoicing when the job is completed:
Spot Invoicing
This is when you bill your customer just after the work is done. This may be accomplished through the use of a web-based invoicing system or by emailing or texting the invoice to the customer.
Invoicing within 24-48 hours after job completion
When you send your invoice to your customer within 1 to 2 days after the work is completed, This can be accomplished via mailing, emailing, or utilizing a web-based invoicing system.
Invoicing in Batches
It's when you wait until you've finished a few projects before sending out a large number of invoices in one go. This can be done once a week, biweekly, or monthly basis.
Monthly Basis
You send an invoice to your customer for services rendered during that month by the end of each month.
The Benefits of Invoicing After the Job Is Done
Below are a few advantages to invoicing your clients after the work has been completed:
- Before sending an invoice, you must ensure that the work is completed to your customer's satisfaction. You may avoid any conflicts that may arise or payment concerns with this approach.
- You may also consider taking your time to create an accurate and complete invoice. This is especially useful if you're working on a huge project with several line items.
- This may also allow you to obtain better payment arrangements. For example, if your customer pays within 20 days rather than the normal 30 days, you may provide a discount for early payment.
- If the scope of work changes after you've started, you may save the trouble of making changes to your invoice.
Invoice Before Job Completion
It may seem rational to send an invoice after finishing the service in order to be paid. However, there are times when invoicing your customers before work commences makes sense. This method of invoicing is commonly known as prepayment or demanding a deposit. So, when should you invoice before a project is finished?
When Should You Invoice Your Customers Prior to Job Completion?
These are several significant circumstances in which you may be able to justify a prepayment from your customers:
- When a substantial deposit for goods or equipment is required for the work. If the task necessitates a deposit for goods or equipment, you might request payment in advance. You may avoid paying out of pocket this way.
- If you're working with a new customer, you might seek a deposit to reduce the chance that they won't pay you for the task.
- If the work is time-sensitive, you may want to invoice your customer up front so that you may begin working on the assignment right away.
- If the project is for a business contract, you may wish to seek a portion of the cash up front. In this manner, you can mitigate the risk of the consumer failing to pay you in full or at all.
- If you have a customer that has a history of not paying on time, you might require a deposit to assure that they will pay you on time.
- Finally, if your company is just getting started or is having cash flow problems, you can seek a deposit to help with your short-term liquidity requirements.
What are the advantages of invoicing before job completion?
- You may get paid in advance, which may assist in covering the cost of materials or equipment.
- You can keep your cash flow under control and your payroll plan on track.
- You may be able to avoid having to follow down late-paying consumers.
- If somehow the scope of work changes after you've started, you may save yourself the headache of making revisions to your invoice.
- You might provide a rebate for early payment to encourage your consumers to pay sooner.
How to Increase the Success of Invoicing Before Work
- There are several hazards associated with prepayment. This is why we've included a few pointers to help you avoid these pitfalls and make it more successful:
- Always remain in touch with your customers. Before you start the project, make sure they understand why you're billing them beforehand and how much they'll pay you.
- Create a thorough professional quote that clearly explains the scope of service, the price, and the timeline for payment. When charging a new customer, providing a payment arrangement in the quotation may be beneficial.
- If you're requiring a deposit for project supplies or equipment, be sure to include the deposit amount in the quote. A 15% to 20% deposit is normally required.
- Make it simple and quick for your clients to pre-pay you.
- Provide a discount to clients who make a full payment up front. You can give them a 5% to 10% discount on their total cost.
What are the best practices for getting paid?
- Whether you invoice your customers before or after the service is completed, there are several key guidelines you should always follow:
- Make a thorough and comprehensive quotation just so your clients know what they are paying for.
- Make certain that the payment conditions and procedures are simple and straightforward.
- Make certain that your customers understand their payment schedule, particularly when it is time to pay you.
- As many payment alternatives as possible are available; prioritize digital and credit card payments for optimal convenience.
- To make a favorable impression on your customers, include comments and photographs in your bills.
- Once you get money from a customer, always write a nice follow-up thank you note.
- Make billing easy by using invoice software.
Use Blinksale Invoicing to Your Advantage
Blinksale is a cloud-based invoicing and payment processing system that offers smart and simple solutions to businesses of all sizes. Our system allows you to simply manage and streamline your invoicing from the beginning to the end.
Key feature of Blinksale:
Invoicing
Make your brand stand out by creating a professional-looking invoice. Blinksale provides you with all of the tools you need to design a customized invoice template for your company. Blinksale Invoicing gives you full control by allowing you to use it with any browser on whatever device you are using connected to the internet, then doing business while you travel is an easy task.
Estimates
Estimates from Blinksale are both impressive and helpful. They enable you to collaborate with your clients on various price agreements and project timelines prior to the start of the actual work or project, ensuring that both parties understand the details of the contracts. And if both sides agree on the specifics in your estimate, you can send it via email for client approval, and it will be simply converted to an invoice.
Recurring Invoices
Set up recurring invoices for all of your clients and receive payments on time. With Blinksale Recurring Invoices, your customer will get automated invoices as well as notification on both ends, ensuring that you and your client are aware of when to pay you.
Get Paid Fast and Secure
Payment processing has never been easier with our powerful, secure, safe, and efficient payment processor integration with ACH, Stripe, PayPal, or Coinbase. Fast and easy payment process with your clients as every Blinksale invoice is embedded with the Pay Button, powerful enough to process payment and no need for your client to sign up to any of those payment methods.
Client Management
Stay on top of your client records and invoicing records in one place. You will be able to simply update and maintain your client information using our system at ease.
Customization
Blinksale's extensive customization allows you to do more with your content's settings, preferences, and smart presets. There's more than just tweaking the settings; it also lets you save line items. Line items from your own line item library can be created, saved, and loaded into any invoice using Blinksale. The quantity, unit, description, and price are all saved but can be modified after loading for further fine-tuning.
Look no farther than Blinksale for invoicing software that will make your life simpler. You can simply manage your invoicing process from beginning to end with our user-friendly web platform. Sign up today and enjoy the 14-day free trial where you can cancel anytime and it is easy to use.
Wrap up
Some companies invoice only after work is completed, while others invoice before. The best time to submit an invoice is when it is convenient for both you and your client. So, pick the ideal time to invoice to suit your situation, and don't be afraid to experiment until you discover the ideal invoicing method.
