The Internet hasn’t only changed the way we access business information. It’s created an entire global business eco-system. What seemed like science fiction only a few years ago now becomes reality, available even to small businesses.
In line with this, the global network has generated some serious changes in the global financial system, increasing the speed of business transactions with various online payment solutions. One of the most useful features of transactions made on the Web is electronic invoicing. In this piece you’re going to learn how your business can become more productive by using those handy options.
When your client needs to pay a product or a service provided by your business, they want to be invoiced as fast as possible. If they have to wait for your accountant to create their invoice, both you and your client will lose precious time. Even if you send that invoice via e-mail, it’s still too slow for modern business standards.
On the other hand, if you add a cutting-edge invoicing solution to your set of software tools, every billing action can be done on the spur of the moment. The client will get the invoice instantaneously, which will give them more time for planning their future purchases.
Creating and sending estimates
Online invoicing also enables business owners to automate the process of making and sending estimates to their clients. Setting deadlines is an important part of every business negotiation. Instead of wasting days on calculating how much time you’ll need to finish the accepted task, you should start using modern software options that can perform swift performances, on the basis of your input. Since the price that you determine for a project will depend on the time required for its completion, it’s crucial to create a proper estimate.
When you add that estimate to your invoice, it will have a three-fold benefit. Firstly, the client will immediately get the full image of the entire business deal. Secondly, they’ll see you’re a responsible business player. Finally, sending estimates and invoices on time will improve your overall productivity, since you’ll also have a clear image of the projects that are pending and the ones that have been finished.
Better control of payments
When you can find details for every single payment made to your business in a few seconds’ time, you can always get an immediate insight into the condition of your finances. Moreover, that way you can easily check if there have been any partial payments recently. Sometimes business owners don’t have enough assets to pay for the entire sum from an invoice. This is an uncomfortable position, since they could lose their credibility if they are late with payments. What they do in such a situation is just pay one part of the sum. That way, they avoid legal consequences, since they can say they paid some amount of the money they owed before the due date. Again, using online invoices proves as a great option here, because every payment leaves a track in your invoicing system. So, when your client pays only a part of the total sum, your system can automatically invoice the remainder of the money to be paid.
You can make great use of online invoicing in reducing the debts that other businesses have towards yours. Firstly, you can create invoice reminders, which can be sent a couple of days before the payment date. By reminding your clients that they have some due payments soon, you protect your business from any potential financial inconveniences. Secondly, you can offer your debtors a special program of gradual debt payment. If they’ve been ignoring your requests for a longer period of time, first try to reach a compromise. For instance, make them an offer they will be happy to accept, such as breaking down the remaining debt in several parts. Just add the sum they owe into your invoice software tool and it will create new invoices for the future payments. Nevertheless, don’t show such a soft attitude to every client. Only the long-term partners and clients should have such a special treatment.
Detailed budget planning
Bringing a business plan is the key prerequisite for a successful business year. However, it’s hard to come up with a reasonable and accurate budget if you can’t identify all the accounts receivable and outstanding invoices. Losing track of invoices is something that can happen to every business owner, regardless of the size of the business. This is why online invoicing and cloud billing solutions should be used. When you have all the invoices kept in one place, you can analyze all the payments that have been made, as well as those that are due in the near future. Having a thorough insight in all your planned expenses and incomes will give you enough information to set a detailed budget. Moreover, when you know what assets you can count on, you can plan your future investments, as well. All those actions are performed with no stress if you use online invoicing.
No tax hassle
Tax regulations differ from country to country, even from state to state, but one thing is for sure – no matter where your business is registered, you have to hand in a tax return. If you don’t want their officials to go through your reports, you should better fill in your tax return properly. Not long time ago, companies would hire accounting companies to analyze their balance sheets and other reports, so as not to miss a thing when reporting their taxes. Today, however, things can be done in a much more efficient way. Namely, modern tools for electronic invoicing offer different options for tax calculations. Therefore, if your invoicing system tracks every single transaction made by or to your business, it will be able to automatically calculate your annual taxes. As a result, you’ll avoid all the administrative hassle that tax returns can cause.
To conclude, online electronic invoicing is the future of financial management. It is already used by a large number of businesses worldwide and we’re yet to see its true rise. Businesses that start using those services today will be able to expand their business network and prepare for their future business projects.
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About the Author
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.