Small business owners. What do you think of this method we use of invoicing? -

My husband and I run a small business. He repairs industrial machines and has over 400 clients he will service. He may only get to some customers once per year and then others several times per year. When he invoices he fills out the worksheet with repairs and the final cost on the spot and hands the paperwork to the floor manager. If they pay him a cheque on the day they get a 5% discount as an incentive otherwise it is 30 days credit. He works on his own and I do the accounts. The thing is that once a month I chase up unpaid invoices. I email overdue notices and call if they fall really behind. Lately they have all been saying the same thing you haven t sent us an invoice . I try to explain that we don t work that way and have discussed it with my partner more than once about this method of payment. I see it as an excuse for them to hold off paying as long as possible. My husband says that he would only be posting out the paperwork he gives to the floor manager anyway as it has the original signature of whoever approved the job to be done. He also says that it is double the paperwork etc and the cost of stamps plus my extra time. I think he has a point. If someone comes to repair something at your house they give you paperwork on the spot - not post it later. He is also not always able to wander around the factory floor unaccompanied to hand it to accounts. To me it should be the responsibilty of the floor manger who approved the job to hand it to accounts - otherwise we could make up what we are charging them for. If we start to send out invoices it puts the pressure back on us especially if it is only 30 days credit and if it gets lost in the mail etc. What do you think?

I run my own business. I always email my invoices out. 30 days credit is exceptionally generous and I d never offer a 5% discount because it somehow cheapens the service you offer. It s like saying we re over-charging you 5% and it encourages people to take you up on the 30 days credit offerIf you want my advice I would drop the 5% discount the 30 day credit. I d put a line on the invoice saying that payment is due within 7 days. If they haven t paid in 10 days I d hurry them up.By giving them 30 days you re increasing the chances that they ll forget. Bits of paper do get lost. At least if you email the invoice there s a permanent record.Make sure you re sending the invoice to the right person (which probably wont be the person who authorized the work). Include the job number etc.Don t negotiate your terms. Tell them 7 days, that s it! It s a professional service you offer not a credit facility - you re not a bank so don t encourage your clients to view you as one!!

I can see your point and theirs. Here s how I d go about doing it. I d continue to offer the discount if they paid then and invoice those who didn t. It s not about who s right or wrong it s about how quickly you collect your money. If sending invoices gets your money quicker then do it. If you are having to waste time and have the extra expense of chasing down those accounts anyway then you haven t lost any time or money by invoicing them. Since you are emailing the past due invoices it shouldn t take much extra time or money to go ahead and send them the invoice before it is late.

It is no big deal to prepare an invoice, from what you describe. It is very unusual for businesses to pay for goods without an invoice, so you are cutting off your own nose to spite your face if you refuse to do this.It s not double the paperwork if he uses a duplicate or triplicate book to write the original bill. He gives the original to the customer at the time he does the work, and the duplicate can be filed as your record (and if you really are averse to typing an invoice, a photocopy of this would suffice).You have to remember that the purpose of having a business is to make money, so getting this part of your business working well is vital.

As a business owner, I never pay anything without an invoice. Paperwork gets lost. Billing accounts receivable is the responsibility of your business, and once I get that invoice it becomes my responsibility to pay it. But if it is a credit account, I expect a bill at the time the account becomes due.