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Client communication and billing are vital parts of business wellness, but perfecting these processes isn’t easy. In fact, 46% of businesses have lost a customer over poor communication, and 77% of customers have experienced a billing issue that affected their trust in a business.
If you want to avoid being a part of that statistic, you’ll need to simplify both processes. This guide will help you do just using the advice from Joist and our own Flock writing team.
How to Simplify Your Billing and Client Communication Process
Simplifying your billing and client communication process may take some time and a bit of restructuring, but you’ll benefit from increased profits and better customer relationships.
Create a Culture of Billing
Creating a culture of billing is incredibly important if you want the rest of the solution in this article to work for you. If you create a structure that allows you to collect fees, and you’re not shy of asking for them when necessary, you’re able to keep your business moving forward.
This doesn’t mean hounding your clients. Joist has a “send a payment reminder” built right into their system that allows you to send a pre-written, polite message request on the invoice.
Not only does this simplify any back-and-forth, but it also shows you mean business. Those contract terms or late fees aren’t going to be threatening if you don’t highlight their importance (more on that later). But to ensure follow-ups are provided, you need to get your staff involved.
Be sure to train your staff on how your invoices and follow-ups work. Explain that prompt payment from clients equals a more stable business, and that’s important for staff paychecks.
Discuss What Should and Shouldn’t be on Invoices
Invoices should be used as a communication tool and not as a separate document. Offering a non-binding range of what the client can expect can remove confusion and shape expectations.
At Flock, we recommend using our product to communicate what should and shouldn’t be on the invoice, as this can change depending on the client. You can create a channel in Flock specifically for this purpose. Then, you can exchange invoices or billing files within Flock for your project manager to see. Once finalized, you can send it off to the client with confidence.
And if you want some best practices for invoice information, here are a few:
- If the fee is a lump sum, the price should be sufficient
- If you’re billing hourly, discuss what was done in that time
Any details like fee structure, fees remaining, work provided, or extra add-ons should be discussed before the invoice is provided, either via your contract or a written message.
Write a Stellar Contract Before Doing Business
One of the biggest problems businesses face when it comes to invoicing is mismatched expectations. If you’ve ever had a client change the scope of the project or be confused as to why they’re charged for a specific item, the clear culprit here is a lack of communication.
Joist recommends sending a proforma invoice, which is a preliminary quote or estimate that outlines goods and services that are yet to be provided. This can show clients exactly what you intend to do and what the client is expected to pay. In the end, this gets rid of a lot of confusion.
However, with 93% of customer service teams saying that customers have higher expectations than before, you need to be incredibly clear about what you’re providing in writing.
Your contract is the most important document you need to get everyone on board. Use your contract to outline billing practices, who the parties are, their responsibilities and roles, the scope of the work, the recommended timetable, and your fee structure.
It’s in your best interest to walk your clients through the contract. If they have questions, you can answer them then. If they try to change the scope, you can state you’ll need to charge them.
Give Clients Options, but Remain Firm
Every business has had that client that agreed verbally to your terms, signed the contract, and is still confused on what they can or can’t do. Whether it’s ignorance or purposeful behavior, the results are the same: wasted time and money for both parties and massive delays.
When delays occur, the first step is to appeal to the client. If they aren’t available to sign off on decisions, tell them to get a third party to do that for them. If the billing timetable doesn’t work for the client, ask them if another time works better. But, only do this once per project. Some clients will use this opportunity to ask for more. Instead, refer back to the terms of your agreement.
As Joist states, you should absolutely do what you can to do right by your clients, but not if it consistently comes at your own expense. You still have a business to run, and you’re well within your rights to ask for late fees or deny a client’s request to establish a healthy relationship.
Use Professional Accounting Software
Proper invoicing and money management go hand-in-hand. If you want to pay attention to your cash management, fixed asset management, and inventory, all of which contribute to better invoicing, you’ll need professional accounting software. But which solution should you choose?
Our article: “The Small Business Guide to Accounting Tools and Software” can give you advice on what accounting software best suits your business. QuickBooks, FreshBooks, and Xero are all great choices, and not just because they take care of your payroll and procurement.
Since accounting software automates a key component of your business, you’ll have more time to spend on client communication and billing. Specialty accounting software can also connect to your invoicing software, thus making it easier for you to keep track of your business's cash flow.
Both Joist and the writers at Flock understand what it means to maintain effective client communication and billing processes. With this combined advice from experts, you’ll be well on your way to impressing your clients, reducing overdue bills, and increasing your bottom line.