3 min read
Welcome back to Back to Basics - a refreshing revisit of some of the core foundations of credit control. This week we're continuing with the fantastic series The 7 Habits of Highly Effective Invoices, to revisit and refresh on the basics of how to get invoices paid on time. Over the coming weeks, we’ll continue to explore a new habit from the series each week.
Last week we looked at the damage belated invoice issuing can do. This week we dive into Habit 2: Begin With The End In Mind.
An invoice has one purpose, and one purpose alone: to get paid on time.
At Chaser, we’re nuts about getting invoices paid on time. Welcome back to The 7 Habits of Highly Effective Invoices, our series on the most valuable things an invoice can do to get paid on time. These are taken from our Founder & CEO David Tuck’s experience working as a Finance Director and Accountant.
Habit 2: Begin With The End In Mind
As we’ve said, an invoice’s sole purpose is to get paid. Habit 2 in this series is about producing your invoices with exactly that in mind.
Your invoice wants to get paid. In short: let it. Your invoice can only be paid if you provide your customer with the full and accurate details about how to pay you; to enable your invoice to unlock the door to the sweet nirvana of getting paid. Your payment details are, to paraphrase the Urban Cookie Collective, both the key and the secret to your invoice getting paid1.
What you need
A big part of getting your invoices paid on time, which we’ll discuss more in subsequent Habits, is about not giving your customer an excuse not to pay your invoice. Not providing the necessary payment details is serving up a big, juicy, easy excuse for your customer to do just that.
I am always amazed by the number of invoices (it should be zero after all!) I received from our suppliers that didn’t have their payment details on. But it’s not just the case of them being there in the first place:
If you change bank accounts, or your bank changes ownership such that your account details change. Make sure the new details are reflected on your invoices. And what about your already issued invoices? Normally banks will provide a transitional arrangement so that incoming payments can still be received with your old details. But it’s essential to check and re-issue those outstanding invoices with your new payment details if you need to;
Cheques. Do you accept them as payment? If so, and definitely if not(!), state that on your invoices. Where you are accepting cheques make sure you specify the address and addressee they should be sent to;
Are you selling overseas? If so, make sure you provide international bank account details so your customer is able to pay you (check out this useful summary from HSBC about what these look like). Even if your customer is not based overseas, it’s still worth including these international bank account details on your invoices. I remember a customer who was a fellow UK business, but a subsidiary of a US parent company. And it was the US company who was paying our invoice. So payment was delayed because we hadn’t provided our international bank account details.
Start With The End In Mind
It’s not glamorous. It’s not groundbreaking. But Habit 2 is the most important of our 7 Habits. Without it, quite simply, your invoice will not be able to achieve its purpose of getting paid. Thanks for reading. Stay tuned for Habit 3: Build on Solid Foundations.
Except they’re not really a secret, as you should be displaying them clearly on your invoice. ↩
Be the first to read the latest blogs by signing up to our mailing list: