If you are a business, whether small, medium or large, you will be aware of the issues that exist around invoicing clients. You hope that when their job is completed to their satisfaction that they will pay promptly but such is often not the case. Clients can take time to pay, blaming their own cash flow situation and if you have too many clients who do not pay you on time, there will be implications for your own cash flow position. As a business, you will no doubt have overheads which may include premises or staff costs and if staff costs cannot be met, then that can have many serious implications for the survival of your business.
It is no wonder then that companies spend time deliberating over what day of the week or what day of the month is best to send their invoice. Then question of when to send an invoice crops up time and time again in business deliberations. Such is the problem that there has been significant research conducted into the question and the truth, to be honest, is that there is no one real answer that would suit every company. Different pieces of research have in fact drawn different conclusions.
It may be that you have structured your business in a particular way and the structure that you have set up allows you only to put out invoices, say, on a Tuesday but remember that the companies for whom you are doing work will have their payment policies and their payment preferences. Some companies are set up in such a way that they pay invoices only on certain days of the month, some pay weekly, others monthly and it would be pertinent to have a discussion with your client about his/ her payment policies and his / her preferences. This would be especially important if you were planning to complete monthly work for them and hope to have a long term arrangement with your client. Clients are often happy to be involved in the process and they are usually happy to discuss payment arrangements and let you know how their business operates in this regard. It may be that you have to work with their accounts department in a particular way and it may be that they have a preference as to how invoices are settled.
It’s always important to establish your ground rules right at the beginning so that your expectations are the same as that of your client. If you are expecting that a deposit be paid ahead of work beginning, make sure that you communicate that and that your client has a clear understanding. Misunderstandings around payments can sour relationships whereas if everyone is clear from the outset, there is more of a chance that your invoices will be paid on time. Routine is important and establishing a good routine that works for both parties can in fat be the start of a healthy working relationship for years to come.