Want to get paid faster for the work you’ve already done?
You know the drill. You complete the work. Your client is pleased… but where is the money?
Here’s the problem:
On average, small businesses lose cash between the estimate and receipt. Not due to non-payment, but because the quote-to-invoice process is inefficient, sluggish and leaky.
If your process is broken, your cash flow is broken.
The great news? You don’t need to know accounting to get it straight. This guide shows you how to master the entire client revenue cycle and set up easy invoicing, no accounting experience necessary.
Let’s jump in!
Inside This Guide:
- What Is The Client Revenue Journey?
- Simple Invoicing Without Accounting Knowledge
- Why Late Payments Hurt So Much
- 5x Ways To Optimise Every Step
What Is The Client Revenue Journey?
Client revenue journey is defined as every step your client/customer takes from the time they request pricing through until their payment posts.
It usually looks like this:
- Estimate
- Approval
- Work delivered
- Invoice sent
- Payment received
Sounds simple, right?
Yet each one of those steps is a point of failure. Unclear estimates lead to invoices being challenged. Late invoices lead to late payments. Late payments lead to cash flow problems.
That’s why the most forward-thinking business owners approach the entire process as a seamless system… not five discrete tasks.
Simple Invoicing Without Accounting Knowledge
Here’s the thing most people get wrong…
They believe invoicing is an accounting task. It’s not. An invoice is merely a straightforward request for payment that duplicates what the client already committed to paying.
If you can write a clear estimate, you can send a clear invoice.
Keep invoicing simple by using a quotation and invoicing program. Once your quote is approved you simply click a button and it instantly converts to an invoice ready to send. No spreadsheets, no manual number entry and you don’t need to know debits/credits. Client info, pricing and tax rates flow through automatically so invoicing will become your easy option even if you know nothing about accounting.
Every good invoice should include:
- Your business name and contact details
- The client’s name and address
- A unique invoice number
- A clear list of work and prices
- The due date and how to pay
That is all. Nail these five and you will beat most of your competition.
Why Late Payments Hurt So Much.
Late payments are serious. They pose one of the greatest risks to your expanding business.
New research from Atradius reveals that 47% of B2B invoices across Western Europe are now overdue. What’s more, bad debts destroy an average of 6% of invoices.
Think about that for a second…
Nearly half of the money owed to businesses arrives late.
And it’s not just lost cash flow. In the UK, studies backed by the government revealed that 14,000 businesses close yearly due to late payments. That’s 38 businesses per day.
Ouch.
Research conducted revealed that businesses lose around 86 hours annually pursuing delinquent invoices. Over two working weeks lost that could have been spent on business development.
5x Ways To Optimise The Client Revenue Journey
Ok, now the good stuff. Here are some steps that will change a chaotic, drawn out process into a streamlined way to get paid. Read through these ideas, implement what works for you and your company and get started right away.
Send Clear, Detailed Estimates
The journey starts with the estimate… and most payment problems start here too.
An ambiguous quote leaves room for questions later. A detailed quote answers questions before they’re asked. Separate the work into specific line items, be explicit about what is (and isn’t) included, and include an expiration date to force the client to move forward.
Clear estimate = fewer invoice disputes.
Get Written Approval Before You Start
Never start work on a handshake.
Get your client to provide a written confirmation of your estimate. Even an email reply is sufficient, though a signed or electronically accepted quote is preferable. This single step can save you if there’s any disagreement over price/scope in the future.
Invoice Immediately
Here’s a simple truth…
The faster you bill, the faster you get paid. Many companies wait until the end of the month to batch-process invoices. This can mean weeks of lag-time before the customer even receives the invoice.
Invoice on the same day you do the work. Your client will still be thinking about the awesome job you performed.
Make Paying Easy
Want to know the fastest way to speed up payments?
Eliminate friction. If your client needs to dig for your banking information or call you to ask payment instructions, your invoice hits the bottom of their stack.
Make it easy by:
- Offering more than one payment method
- Adding a QR code or payment link
- Putting the due date in bold near the top
QR-bill is standard in Switzerland. Clients scan and pay within seconds from their banking app. Neat stuff.
Automate Your Payment Reminders
Chasing clients is awkward. Nobody enjoys doing it.
That’s where automatic reminders become so powerful. Schedule a gentle reminder a couple days before it’s due. Set another one on the day it’s due. Set one more friendly, but firm reminder a week later.
The best part?
When it’s established, you never send another chaser email. The system follows-up on your behalf and keeps your client relationship healthy.
Keep It Simple (Seriously)
The number one mistake business owners make is trying to make things too complicated. They buy fancy accounting software, get frustrated within the first week, and resort back to Word docs and sloppy spreadsheets.
A process that works and is adhered to is better than a perfect process that nobody uses.
Pay attention to accurate estimates, speedy invoices and easy payments …and everything else will align.
Bringing It All Together
Going from estimate to payment doesn’t need to be anxiety filled. Make a few small tweaks and get paid quicker leaving you way less time chasing cash.
To quickly recap:
- Send clear, detailed estimates
- Get written approval before starting
- Invoice the same day the work is done
- Make paying as easy as possible
- Automate your reminders
- Rinse and repeat
Keep in mind that invoicing doesn’t require accounting knowledge. You can do this without a degree in finance. All you need is a solid process and the habits + discipline to follow through.
Get those in place and watch your cash flow thank you for it.