3 Tips for Designing an Invoice That Gets You Paid Promptly

Cash flow is one of a business’s most important
metrics. You may have a lot of sales and make a hefty
profit margin, but when you don’t get paid on time, your
business suffers. You have to pay employees, purchase
inventory, as well as other necessary out of pocket
expenses – all of which costs money. Yet many
businesses report problems with getting paid on time,
even for work that has been done and delivered.
You invoice your customers to get paid, but have you
ever considered whether you’re using it correctly to
increase your chances of getting paid on time? To do
that, your invoice needs to include three key elements:
1. Establish rapport.
Establishing rapport means stating the details of what
was delivered, what is owed and that the customer
committed to make a payment. You need to clearly state
what products or services you provided and refer to the
agreement you signed as well as the payment terms that
you agreed on.
We found that the language you use in conveying the
commitment to pay can change the customer’s
response. Most of us tend to become rigid and
demanding when we refer to legal commitments. We
tend to write in what we think is “legalese”. While middle-
aged business owners respond well to formal language,
millennial business owners are turned off when faced
with it since they view such language as threatening. It’s
vital to adapt your language to your customers’
expectations to get your message across.
Related: Remember These 8 Rules Before Sending Out
Your Next Invoice
2: Defining a process.
Parkinson’s law says that work will expand to fill the
time that’s available to complete it. So will your
customer’s payment behavior. You might have a due
date on the original agreement but the customer will
often miss it, either intentionally or accidentally.
Anything that’s more than a few days out often gets
forgotten.
To counter that, always work in short cycles. Provide
ample notice before a payment is due and follow up
several times in shortening time frames. We found that
three days prior to a payment is the ideal time to send a
reminder. This pattern should stop at payment
reminders: if a customer happens to be late, and you
send a demand for payment, make sure that you give
him a deadline for payment, too. Write “Please make a
payment immediately or contact us in the coming three
days”.
Of course, you have to stay honest to your process.
Some follow up has to come when these days pass.
Related: The Buck Stops Here: How to Make Invoicing
Less Excruciating
3: Removing obstacles.
Once the customer accepts your authority and is aware
that a payment is due, the last thing that remains is
excuses and how to manage them, but your invoice can
go a long way in responding to excuses even before
they’re uttered.
One of the main excuses we see is disagreement with
the content of the invoice or the stated work long after it
has been delivered. This is really an attempt to
renegotiate price. Most business owners tend to assume
that if the customer voiced no disagreement when the
work was done, he agrees to the charge and will pay. We
found that this is not the case. Often, especially when
the charge is big, you could run into disagreements long
after a payment is due.
Don’t run away from a dispute. Make it part of your
process, and set boundaries. Be explicit about the
process: write “If you wish to dispute this charge, please
contact us in the coming three days”. Be ready to
discuss and listen to your customer because losing a
customer’s future business is much worse than a 5
percent discount if you accept a dispute over a minor
item.
Using the right language in your invoice can significantly
reduce your time to getting paid. The right language
creates a connection with your customer, defines a
process to get paid and removes obstacles that would
otherwise hinder payment. These are simple yet
effective elements you need to make sure are included in
every communication with your customers – not only to
get paid, but to also maintain a healthy relationship.