Do you avoid doing your own invoicing?
Why do we prioritise our clients over our own business?
What would you recommend to your clients if they didn’t invoice for weeks or months after work was completed? Does that sound like good business sense?
Guess what – I was guilty of this too.
I would always (I tried to type ‘regularly’ here. But ‘always’is more accurate – I can’t lie) invoice weeks after work was completed when I was absolutely desperate for money.
I’m not sure if it was because
- I didn’t value my work
- I just wasn’t organised enough
- I hated the activity of invoicing
- It didn’t earn me money
- I had more important things to do
- I was too busy
- There was always client work needing attention
For years that is how I ran my bookkeeping business and as I employed more staff and had additional overheads it became extremely stressful. I was often waking at night stressed and panicky I couldn’t pay wages next week or next month’s rent. My mentor suggested I get an overdraft for the value of my monthly invoicing just in case and to take the pressure of cashflow off the table as I was in growth mode. This is probably the only thing I did not do that my mentor had recommended. There was no way I was going into debt. But something had to change.
The change was quite simple but applied consistently meant I didn’t need to get that overdraft or fund the cash flow from my own pocket.
Create a habit and do it consistently. My habit was to invoice weekly. Friday afternoon was my day that I worked on my business – including spending up to 3 hours every week to invoice the work that had been completed during that week. The system I set up at that time was
- Invoice every Friday afternoon
- Invoice on completed jobs during that week – for example:
- Any BAS’ completed
- Any monthly jobs completed
- Any adhoc work completed
- Any other jobs completed
NB I didn’t invoice until a job was completed but by invoicing every week I would capture 6-12 jobs that were completed during that week
- However there were some clients I invoiced monthly on the last day of the month for the entire month – but these were few at the time I started this new discipline
What you invoice or how you invoice is not important in this exercise – what is important is that you set up a system on when and how you invoice and do it without fail. You do not leave work until your invoicing is completed for the week.
How I did this was
- Firstly change your mindset – you will not succeed if you do not prioritise your own business ahead of client work. Forget it, it just won’t happen.
- Secondly schedule it into your diary and do not cancel the appointment. Consider it critical to the continuation of your business. No exceptions.
- Thirdly work out the system of Invoicing that will work for you to ensure you get regular cash flowing into your business and isn’t time-consuming or too complex. Keep it simple and it will work. (Some time later I stopped invoicing weekly and changed it to fortnightly as I wasn’t under the same cashflow pressure)
- Fourthly incorporate automation into the collection of your customer payments. I set up Ezidebit for both my software subscriptions and the irregular invoicing. My terms were 7 days and Ezidebit deducted the funds from the clients’ account 7 days after invoice date.
The first thing I noticed was that I no longer felt guilty or stressed about not invoicing. I knew I had a system for invoicing, debt collection under control and a schedule so I knew it would be done.
Obviously, the cash flow improved immeasurably; therefore I wasn’t so grumpy during the day or stressed about whether I had money to pay the staff or next month’s rent.
One of the biggest improvements was it allowed me to focus on the growth of my business as I couldn’t expand or employ more staff if I was concerned how to pay the current staff. My staff morale improved as we could spread the work among new employees, we were no longer under immense pressure and I didn’t have to work ridiculous hours to get work done because I was understaffed. It really is a catch 22.
I think we all know money is one of the biggest stresses in our lives. It not only affects our business but it can also affect our family life and our health. So why allow a simple process to stand in your way of your business success?
Look after your own business so you can look after others.
Katrina Aarsman (BAcc) built a successful bookkeeping business over 15 years and sold in 2015. She now focuses her energies in helping other business owners grow their bookkeeping business with an emphasis on automation. Katrina offers customised mentoring programs, strategy sessions and webinars. She would love to connect with bookkeepers with a desire to grow.