Invoice management is a critical facet of every growing MSP. Without proper invoice management, it can be tough to tell how well your company is performing and what amount of your revenue can be considered net profit. However, perfecting your invoice management strategy can prove challenging.
Many companies turn to invoice management software to help handle many details involved in making invoices and ensuring they’re paid on time.
However, if you want to get the most out of these, you’ll need to know how the process works without them. Then you can optimize your entire billing process with a carefully implemented system going forward.
There are numerous ways to create an invoice from scratch, but the traditional approach - starting with a template and filling it in - still works well. Important details that are normally in a professional invoice include:
To create an invoice for tax reporting purposes, you can also follow the traditional template method. However, it’s important to note that a tax invoice requires specific details to be valid, including the following:
Invoices can be sent to customers in various ways, including by mail, in person, and by email. Emailing invoices is common and can work well for many different companies regardless of their customers' locations. If you decide to deliver your invoices via email, it may help to include them as attachments rather than paste them into the body of your message. You can also put the invoice number and your company name in the subject line to make it easier for your customer to keep track of them.
Tracking your company's invoices usually means keeping tabs on who has paid for what. It also includes
Leveraging the power of accounts receivable metrics earlier can help companies smoothly handle unexpected financial emergencies such as tax audits, mergers, and bankruptcies. You could go the old-school route and stuff everything into a single spreadsheet with details of who owes you what and when you expect the payment, but this becomes complicated as your company grows. More advanced metrics that are automatically captured can give you much more helpful insight into how your invoicing efforts are panning out.
Among the many metrics worth paying attention to are the individual invoice payment terms such as payable on receipt conditions and specific payment periods. The number of invoices your company has issued in a given period and the "days sales outstanding" or "DSO" can help you track if your issued invoices are getting paid on time, as well as which kinds of invoices work best for your customers.
As your business grows, so will the number of invoices you’re tasked with dispatching and keeping track of it. There are many factors you’ll need to account for to ensure your invoicing process continues to work out:
Data entry is one of the main bottlenecks most companies run into when refining their invoicing processes. Cutting out this step and other mundane and repetitive work involved in invoicing can help your team get back to your company's actual business. It can also help you keep clerical errors and costly mistakes to a minimum.
This is where automation works best, but not all invoicing automation tools are made equal. It’s essential to understand how a proper invoice management system can affect your company's success.
The Zomentum Revenue Platform can give your team access to an entirely automated billing service tailored to ideally fit IT service providers and MSPs. Whether you need to connect reseller accounts with other third-party services or simply keep up with unbilled licenses that have slipped through the cracks, Zomentum is here to help you protect your revenue.