Bill, Bill, Bill: A Sale Is Not A Sale Until You Invoice

"Bills, Bills, Bills" is a song by Destiny's Child. In that song, they're talking about bills you have to pay. As a small business owner, your main concern is the opposite which is to bill, bill, bill. The word "bill" in business can be confusing since it has more than one meaning. A bill is used as both a noun and a verb. As a noun, a bill is "an amount of money owed for goods supplied or services rendered". As a verb, bill means to send a note of charges for goods or services. The word bill is synonymous with invoice when used as verb. I personally prefer the word invoice because it is like a mnemonic, "you have to INvoice a customer to get INcome."

Standard invoice terms include when payment is due. The most common invoice terms is net 30 which means payment within 30 days. However, as the small business owner, you can set payment terms to be can be "due upon receipt" or "net 15". To encourage payment before the end of 30 days, some businesses offer a discount. For example, "2/15 net 30" means if payment is received within 15 days of the date of the invoice, then the customer receives a 2% discount. Discounts for early payment are good for regular and repeat customers, but not good for one-off customers.

Because it is crucial to manage cash flow, it is important to invoice customers as soon you can since actual payment may not happen until a month later. A sale is not really a sale until an invoice is sent to a customer. For a service professional like a website designer, it is best practice to invoice for partial payment when the work starts and invoice again when work is completed. Some of my former bookkeeping clients would send an invoice to customer for 50% of the work at the beginning of the job and then send another invoice at the end. To make invoicing easier, Xero online accounting lets you set up recurring invoices easily so that you can set monthly invoices for customers. That way you can "set it and forget it". The more you bill, the quicker you will get paid.

Author:.

Nichelle Stephens has attended two universities, attained one degree in Accounting, worked for two Big 4 firms, one major retailer and has lived in 4 cities. She knows numbers! Nichelle Stephens hold a Bachelor's degree in Accounting, and she is a bookkeeping expert. She blogs about financial technology and accounting issues for small businesses on her site, Keeping Nickels. She is cupcake enthusiast. Nichelle is also a cont...

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