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How to Improve Your Billing Process

For small businesses, the billing and collection process is often a nightmare of titanic proportions. Late payments are rife, meaning that your team has to spend even more time on bill processing. Plus, it’s easy to underestimate the importance of the customer billing process. To ensure that sales and finance are working in harmony, you need to maximise efficiency within your company’s bill payment process flow. But that’s easier said than done. Learn how to improve the billing process with our simple guide.

1. Agree on terms with the client

First off, it always helps to come to an agreement with the client before you start delivering work. These terms should clarify several areas associated with the bill payment process, including the types of payment that you accept, the timeframe within which the client is expected to pay the invoice, the late payment penalties that may be charged if they don’t pay on time, and whether you bill by the project or on an hourly basis. Setting terms early in the relationship can help ensure that everyone’s on the same page so that there aren’t any surprises when you send over your first invoice.

2. Automate your invoicing process

Automation is another factor that can have a drastic effect on your billing and collection process. Your company can use automation tools to speed up invoicing. From creating invoices automatically to sending automatic overdue payment reminders, automated invoicing systems can help to cut down on the admin related to the customer billing process, thereby maximising efficiency. Also, you can automate payment recoveries – i.e., dunning – to ensure that you don’t waste too much time on payment retry attempts.

3. Offer a range of payment methods

From credit cards to cheques, bank transfers to digital wallets, there is an extensive range of payment methods that your clients may wish to use. Rather than a rigid bill processing system that only allows several forms of payment, you should strive to offer as many payment options as possible. This can help you onboard more international customers – who may have different payment preferences to UK clients – and scale globally. You may also wish to consider alternative payment methods, such as cryptocurrency, to really maximise the scope of your company’s accepted payment methods. 

4. Minimise errors

Throughout your bill payment process, it’s vital to reduce errors as much as possible. Mistakes – for example, an incorrect address or a missing PO – can lead to confusion and mistrust, while also slowing down the billing and collection process considerably. Efficient accounting software will minimise invoice errors, but it’s also important to supervise this process and ensure that a member of your accounting team checks every invoice before it gets sent to a client. If that’s not possible, spot checks can help you to maintain the accuracy of your invoices and identify potential errors. 

5. Consider Direct Debit

As we mentioned earlier, there is a broad range of payment methods that your customers may be expecting to use. Why not consider Direct Debit? Because it’s a “pull” payment, your clients won’t have to take any action – the payment will be taken from their account automatically. For anyone who wants to learn how to improve the billing process, switching to a Direct Debit payment solution like GoCardless should be high on the agenda. 

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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GoCardless Ltd., 600 California St, San Francisco, CA 94108, USA

GoCardless (company registration number 07495895) is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, registration number 597190, for the provision of payment services.