For businesses with an online presence, making a sale in the digital space is wholly different from the usual brick-and-mortar setting. There are various factors, such as the number of online retail platforms, different payment processors, and varying currencies, to consider when seeking payment for their goods and services, making the process challenging.
This is why it is time-consuming and tricky for entrepreneurs in the e-commerce industry to keep track of their invoice accounting. Nevertheless, it is crucial for them to do so as even the tiniest error in the invoicing process can impact their cash flow management. Let us share the three most common invoicing issues that businesses face so you can avoid making the same mistakes.
1. Sending invoices with errors or missing information
Although it may seem obvious, it is still important to mention that one should put in proper care and attention when drafting the invoices, even when using templates that simplify the process.
More often than not, many issues can arise simply because the invoice lacks vital information that both parties need to complete the transaction. Further down the line, this mistake might even impact your tax filings, as without the crucial details, you might struggle to reconcile the transaction with your tax amount.
Therefore, as a rule of thumb, always double-check that the invoices contain the correct information before sending them out. Here are some essential pieces of information to take note of:
- Names, addresses, and any other relevant details about the buyer and seller
- Due date of the invoice
- Sufficient details about the items or services provided
- Payment details
Additionally, it is best to include any late payment fee on your invoices. This way, your clients won’t be surprised when they are charged extra on top of the original quoted price when they submit a late payment.
2. Making it difficult for clients to pay you
In today’s day and age, convenience matters a lot for the modern customer. So if your company’s payment process is not quick and straightforward, you are likely to encounter more challenges getting your money on time. Therefore, it is imperative for you to state your preferred payment method on the invoice, so your clients are aware of this information. For example, if you want them to pay via a bank transfer, ensure your banking information is displayed on your invoice.
Alternatively, you can consider streamlining your payment process and adopting convenient payment processors widely used worldwide, such as PayPal. If your business operates in various regions, it is good to look into the specific payment processors popular among the locals and incorporate them into your payment system. These methods also automatically allow your customers’ payments to match your accounts, making it easier for you to keep track of your company’s transactions.
3. Not using company branding on invoices
It is easy to overlook the fact that your invoices are representative of your company. Branding your invoice allows it to stand out by improving its recognisability and standing in a crowded market. Moreover, an interesting brand design ensures your invoice is prominent even in a sea of paperwork, reducing the likelihood of your client disregarding it, resulting in quicker payments.
Conclusion
Keeping timely and accurate track of your invoice accounting minimises the risk of cash flow management issues. Therefore, it is crucial for you to ensure you avoid these common invoicing issues so your company can better manage its cash flow and continue to operate without a hitch.
However, with the unique challenges presented by the e-commerce industry, it can be an onerous task to keep track of your invoice accounting. If you are encountering difficulties reconciling your invoices in your financial report, you might want to consider outsourcing your accounting needs to a specialised firm. At Ackenting Group, we provide an extensive range of professional accounting services to suit your business’s needs. With our experienced team of accountants overseeing your financial reports, you can rest easy knowing you will receive precise and timely updates on your company’s finances.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
