Did you know that invoice errors can cost your business millions of dollars?
Invoice errors may seem like a common problem for small businesses, but these common mistakes can cause huge problems down the road.
Read on to find five common invoice errors and how you can avoid them.
1. Using Incorrect Billing Addresses
This error can cause all sorts of problems, including bounced checks and an inability to accept bank payments. To avoid this common invoice error, make sure you or your bookkeeper enters the correct billing or business address for every customer on the account. It is common for a company to have multiple addresses they use, so ensure that each has been entered correctly.
It’s also essential to include all necessary contact information with your invoices and statements. Otherwise, not only will the payment take longer and incur additional fees, but it may end up in the wrong hands, causing all sorts of problems.
2. Using the Wrong Account Number
When entering your invoice account numbers, make sure they’re all accurate and correspond to the right accounts on your billing software. Be careful not to confuse similar account numbers.
This is one of the most common invoice errors, and it often leads to incorrect invoices and payments. It also leads to additional bank charges and processing fees. One of the best things you can do to avoid this error is to use an online invoice maker to simplify the process.
3. Neglecting to Note Terms on Invoice
This is one of the most common invoice errors for small businesses. Make sure all invoice terms and conditions are included, outlined, and clear. Include the payment due dates, deadlines for accepting payment dates, and late fees.
Moreover, include all other charges related to special terms and conditions outlined in the agreement between you and the customer. Not being clear about the terms and conditions of a deal can result in loss of payment and legal difficulties. Do not leave anything out.
4. Creating Duplicate Invoices
It can be very difficult to keep track of duplicate invoices. Two or more customers may ask for an invoice the same day. The next thing you know, your invoices are out of sync, and you have duplicate items or services that were already paid for on the wrong invoices.
Without a solid system in place, sending out invoices can prove to be a challenge. This makes it one of the most common invoice errors, and to avoid it, you need to keep each customer’s file separate.
5. Not Tracking Invoice Expenses
There are lots of small businesses out there that don’t track expenses related to invoices. Most of the time, these costs aren’t even added to the total amount on the invoice, which is not good for business. Failing to calculate your actual profit makes it very difficult to have an accurate financial plan.
To avoid this invoice error, ensure that you’re adding all applicable expenses into your invoices. This way, you’ll know how much money is coming in and if the item or service will actually make a profit for you or not.
The Top Common Invoice Errors and What You Can Do to Avoid Them
Don’t let common invoice errors hurt your small business. Take the steps necessary to avoid them as much as possible and ensure that all details for invoices are accurate. The wrong billing information can cost you a lot of time and money, so always ensure that you send proper invoices on time and to the right parties.
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