This is a guest post from Jessica Day – Senior Director, Marketing Strategy, Dialpad.
Maintaining a healthy cash flow is vital to every business. A fundamental way to keep cash moving is to maintain a standard invoicing process. An efficient process allows invoices to be sent at the right time, makes payments straightforward, and promotes prompt payments.
Dramatic improvements in technology have transformed almost every area of business, improving efficiency and accuracy, and cutting costs. Yet many companies stick with familiar manual processes for handling contractor invoicing. Unfortunately, manual invoicing can be slow, laborious, and error-prone.
But it doesn’t have to be this way. Current contractor invoicing technology is robust and easy to get to grips with, allowing seamless invoicing.
What’s included in an invoice?
While the exact details and supporting documentation might vary, the following details is typical of a standard invoice:
- The date of issue
- Contractor name and address
- Client name and address
- A list of goods and services covered
- The price and quantities of goods and services
- Terms of payment
That doesn’t seem complicated, so why the need for automation?
The problem with manual processing
- It’s a dull, repetitive task. Your staff could be better employed on other, more valuable activities. They will feel developed and motivated, which is excellent for your business. Why not train them to make greater use of audio and video conferencing?
- It’s a slow process. Invoices must be accurate, but checking takes time, which costs you money.
- All that manual activity is prone to error. Mistakes could mean delays in payment (39% of all invoices are paid late), annoyed customers, or incorrect payments, which can negatively impact business.
This routine work is precisely the area that automation software handles best.
What can the software do for you?
It always pays to utilize software designed to improve your type of business. A law firm can get a boost using a legal phone system. Similarly, a company with many invoices will be more effective if it takes advantage of invoice automation.
The core function is to quickly create and issue contractor invoices and send them exactly when you need them. No need for error checking as the element of human error is removed.
Most software will track projects for you, and it will issue reminders when needed, and you will have all the information you need to keep on top of things.
The software has it covered whether the invoice is from a general contractor to the client or a sub-contractor to the general contractor.
Worried about user adoption? Reassuringly, there are many techniques to overcome this.
What if documentation is required?
Some invoices will require receipts as proof of payment or other documentation such as insurance details. All of this can be covered automatically, meaning the correct invoice, with all the documentation you need, every time.
Can it handle changes and repeats?
Yes. Repeat invoices can be set up and tailored to the frequency you require. You’ll also want your invoicing software to be flexible.
You can input changes to the details of the supplier or client, including the order. Invoicing software must easily accommodate other attachments such as stop notices, lien waivers, and discounts.
You can even take this a step further. With your client’s agreement, you could automate the actual payments of recurring invoices. The client could set up the details for auto-pay or give you credit card details over the phone. Within a trusted business relationship, it will save both parties time, and money, making the process more efficient.
Managing late payments
Automated invoicing software takes the stress out of handling late payments. They will automatically issue gentle reminders (which will reduce the volume of late payments) in advance of the due date.
If the due date is missed, reminders will be issued at predefined intervals. Failing to take action on late payments is another cause of lost revenue, and automation will avoid this pitfall.
Better communication and regulation
Automated systems can link into email and text, making communication slicker, helping the recipient see the message quickly. This ensures important messages like payment reminders are seen faster.
Some regulations around contractor invoicing can make it challenging, and they can also vary region by region. Automated systems will allow you to configure templates, ensuring legal requirements are met. You won’t have to waste time double-checking each invoice for compliance.
Will invoice automation cut costs?
The simple answer is yes. Invoices can be complex and take hours to compile manually, and that’s before you even begin to double-check. You’ll avoid all the rework and delays caused by human error.
There are many real-life examples showing that businesses save significant employee hours every week by removing manual invoice processing.
Issuing accurate and complete invoices at the right time will make life easier for you and your client. It gives out the right signals, boosting your image, and improving your client’s confidence in your business. You could even align this to broader initiatives, fostering business relationships by exploring b2b referral programs.
It’s hard to avoid the conclusion that automated invoicing systems in construction have tremendous advantages for all but the smallest businesses.
Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a modern business communications platform that takes every kind of conversation to the next level. Dialpad small business VoIP turns conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns.