Clever Ways To Prevent Billing Disputes And Get Faster Payments

Introduction

One of the most crucial parts of running a business is dealing with situations of continuously reminding clients about their late payments. It gets harder when the business owner tries not to create a conflict by adding extra charges for the delay. Mentioned below are a few things that every business owner can keep in mind to avoid conflicts and make their clients pay their bills by the due date or even earlier.

1. Creating a Solid Contract

Creating a solid contract with the client, mentioning clear payment terms, is a primary way by which the owner can ensure payments by the expected date. The contract should clearly show the important details of the transaction, and the parties should have consented to the terms of agreement before beginning the work.

The owner can negotiate the payment terms upfront so that the client is in sync regarding the payment policy. The owner can decide the payment terms on each bill being made in terms of ‘net 30 or net 60’ or ‘due on receipt.’ For larger projects, it will be feasible for the owner to take half the bill at the beginning of the project, and the other half can be taken after its completion. This will create good faith among both parties and serve as an indication for the owner that they are likely to get paid after the work is completed.

2. Make Payments Easier

The owner can try to reduce the client’s work by offering various modes of payment such as cheques, credit cards, direct deposits, or an online payment system. If the owner is willing to accept payment from different modes, it increases the chances of the client making the payment on time; the owner will find themselves reducing the chances of chasing late payment.

To make payments easier and faster, the owner can opt for smart invoices or adapt accounting software to help deliver the bill in the client’s hands. This will also help save expenses incurred while sending the bill and reduce the chances of getting lost. Sending an e-invoice will also help the owner revise the bill easily if necessary, even when they are away from their workplace.

3. Making the Bills Professionally and Wisely

Maintaining proper courtesy and consistency will help the owner retain customers for long periods as they will know exactly how much is to be paid and when the payment has to be done. This will also help them in managing their budget easily. The owner may opt for sticking to a regular payment schedule, which will reduce confusion for clients as to when payments are due. Also, the invoice shall clearly state what the client is being billed for, and the mode of payment shall be recorded in the bill so that if there is any issue in the future, it can be easily solved.

4. Following Up and Staying in Touch With the Customer

If the client’s payment is to be made after completing the project, the owner should stay in touch with the client regularly. Good communication has to be maintained with the client, which will help understand the partnership from both sides very well. A healthy client relationship will help the business in reaching agreements without fracturing the client-business relationship.

5. Importance of Billing for a Successful Business

Irrespective of the size of the business or whether it is publicly held or privately held, billing is the most important aspect of running it. If billing is not done properly, the cash flow system will dry up, and the whole business will collapse. Billing comprises three parts, namely, invoicing, statements, and collection. Invoicing is the first step in the billing stage. It involves the recording of the sales order and the charge that has to be made. It is an important step as it helps determine the final price for both the owner and the customer. The second stage is making the statement. The statement acts as a reminder for the customer on when the bill is due. The collection is different from the first two steps. It does not require any form; it involves taking the money due from the customer.

6. What are the Advantages of Having a Billing System?

Listed below are a few benefits of implementing a proper billing system for a business:

1. It helps reduce the material costing that is incurred when bills are prepared and filed manually.

2. The instant invoice generated helps the customer in getting a clear understanding of the charges and deductions made for the particular transaction.

3. If combined with external software, it will help track the business’s operations.

4. Professional-looking and accurate invoices can be designed with the help of a billing system using multiple templates.

5. It makes the GST calculation simpler and faster.

6. Quick scanning with the help of offer codes and barcodes helps avoid manual calculation, thus preventing unnecessary calculation errors and long queues in shops.

7. The automatic feature of the billing system helps keep customers in the loop about changes, offers, and business deals.

7. The Benefits of E-Bill Payment Options

The following points describe some of the advantages of an e-bill payment system:

1. Savings of time and labour: The quick generation of mail invoices saves a lot of time and effort. Sending electronic invoices over the phone via a link in text messages can help make the payments online with the help of a mobile phone. The more and more businesses start accepting electronic payments, the more efficient their operations become.

2. Better cash flow: With the help of electronic payments, customers can make the payment any time of the day or night. This is an advantage for the owner as they do not have to wait for the payments, which get automated. The payments are reflected in the companies accounts faster; this helps increase the cash flow as the payments do not remain tied up in the processing stage.

3. Helps in increasing customer satisfaction and loyalty: With changing times, customers prefer handling their bills electronically rather than in manual paper mode. With this comes various electronic payment modes offered by the business that make customers more satisfied.

4. Savings in cost: A business will save a part of its cost on postage, paper, and labour if it shifts the billing and payment methods to electronic modes rather than opting for paper-based billing and collection methods.

5. Customer base will be expanded: If customers are given the option of choosing between a business that offers electronic payment and one which doesn’t, they would like to choose the former one. This is more true for the millennial generation as many do not know how to write a paper cheque.

Also read:

1) E-Commerce Tools Every Small Business Needs
2) The Rise of Ecommerce over the years
3) E-commerce Business Ideas: What Should You Sell?
4) E-Commerce Customer Service – 10 Best Practices [guide]

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FAQs

Q. What are the disadvantages of a billing system?

Ans. One of the disadvantages of having a billing system is that the invoices can be turned into spam folders by flagging email servers delaying the payment; it will not help reach offline customers who do not have access to the internet. It will not be cost-effective for small-scale businesses.

Q. How to manage bills easily?

Ans. Managing the bills can be a difficult task. Still, the owner can begin by making a list, creating bill-paying spaces, reviewing the due dates timely, telling the customers about the grace period, and streamlining the payment process.

Q. What is billing software used for?

Ans. Billing software is used for saving time, making immediate updates, generating customer invoices, tracking bills, creating brand identification, simplifying statements, and managing the expenses record easily.

Q. Which kinds of businesses can use a billing system?

Ans. Businesses and corporations like hospitals, banks, shoe showrooms, salons, massage centres, hotels, pharmacies, Kirana stores, pet shops, supermarkets, furniture shops, seasonal businesses, etc., can use billing systems to ease their work.