Maintaining an inbound-outbound cash stream is crucial for any business. More often than not, a business’s outgoing cash flow is more frequent than the incoming. In other words, on a regular basis, any business has a recurring expense of employee’s salary, purchase inventory and other miscellaneous expenditure all of which requires money. Now, in the eyes of books your business might be making profits, business is growing, but when you don’t get paid on time, your business suffers. This remains a problem to be considered for the work which has been finished and delivered.

One might be thinking what more could be done beyond sending professional invoices on time? How to increase your chances of getting paid on time? There is a very simple solution for your business to get paid promptly. Design your invoices in a way that it leaves no loopholes for your client or customer to escape or delay the payment. Your invoices should consider including the following three key elements:

1) Build Rapport

What we mean by developing a rapport is all about the details of work submitted, a payment amount owed and the payment terms that bind the customer to pay. Ensure to mention the work and/or services rendered in detail and also refer to the payment conditions and agreement that is signed regarding the payment committed. The verbiage conveyed in the payment agreement plays a major role in getting paid on time. With payments overdue, businesses often refer the notice with legal commitment and penalty. Middle-aged small & medium business owners respond well to formal payment language while the young millennials running startup enterprise are turned off with the same language and sees it as threatening. Hence, it utmost necessary to adopt the verbiage that will meet your customer’s expectation as well as get you paid faster.

2) Follow A Process

Customers frequently miss out to pay by the due date. Can’t say for sure whether it is done in error or deliberately. A general rule of thumb indicates that any payment that’s more than a few days out is often going to be forgotten. Hence, it is recommended to send regular payment notice before the payment is due and frequent follow-ups in short time frames. In other words, following the short cycles is beneficial. You can start with such notices with 3 days prior to the payment due date which is considered to be ideal. However, if the customer is past-due then, your demand payment notice should ensure to have a deadline for the payment. Of course, following a strict follow-up and stringent payment process is necessary to maintain the cash flow of your business.

3) Remove Challenges

Overdue invoices from customers will often result in argument and disputing charges for the services and work long after it has been delivered. This is nothing but an attempt to revise the final amount. This could happen even long after the payment is due. Beware, that the customer might come up with excuses regarding the work and/or service but your invoices should be clear with the pre-defined counter-argumentative solution for those excuses in condition statements.

Even if the customer wishes to put up with dispute then be ready with the process. However, keep in mind that it is better to give away a 5% discount over a small disputable item rather than to lose the future business from the customer.

Using a suitable language in your invoices would definitely increase your chances of getting paid quickly. Your tone and verbiage in the invoices will set a positive connection, define the clear process and eliminate any challenges that might block the payment.

Summary:

If you are unsure and are looking for on-the-go available & free invoice generator then look no further than Moon Invoice. You can go with a free trial period and check for yourself how seriously your clients take you and your work so that you get paid quickly. Moon Invoice is the best invoice app maker that has proven to be boon for solopreneurs, entrepreneurs and business owners.

Recurring Payments Vs Recurring Invoices

Recurring Payments	Recurring Invoices
Recurring payments charge the customer’s credit card account or debit card account on a predetermined schedule for the same amount as preapproved.	Send an invoice to your customer on a regular basis. The client receives the invoice but, money is not paid unless the customer approves.
A business that takes prepayment of money and sells a monthly subscription service and product. Subscription services are excellent examples of this.	A company that provides fixed services with billable hours is an excellent choice for recurring billing. For example law firms and consulting agencies.

Pros and Cons of Recurring Invoices

Pros	Cons
You eliminate the possibility of human error by automating the billing process. If you use a recurring invoice, you will not be concerned about forgetting to charge your customers for the things they ordered.	You must exercise caution while recurring billing to prevent issuing inaccurate pricing. This also holds for price changes that could take place right once an invoice is created.
If you provide your customers with the option for recurring billing, they are more likely to buy products regularly.	It could be difficult to cope with recurring invoices if a transaction fails for any reason.

Net 45	Invoice is due in full within 45 days with no early payment discount offered
2/10 net 45 terms	2% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/15 net 45 terms	1% discount if you pay within 15 days; otherwise full payment of the invoice is due in 45 days
1/10 net 45 terms	1% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/7 net 45 terms	1% discount if you pay within 7 days; otherwise full payment of the invoice is due in 45 days

Category	Net Method vs. Gross Method	Explanation
Calculation Approach	- Applies tax credits first; reduces taxable income before computing tax liability.	- Doesn't apply tax credits; computes taxable income without considering tax credits.
Tax Credit Eligibility	- Allows for greater likelihood of tax credit eligibility due to reduced taxable income.	- Limits tax credit eligibility because taxable income hasn't been reduced yet.
Itemized Deduction Requirement	- Lowers threshold requirement for itemizing deductions due to decreased taxable income.	- Raises threshold requirement for itemizing deductions due to higher taxable income.
Advantages	- Leads to lower taxable income and increases chances of meeting qualifications for other tax benefits.	- Results in higher taxable income compared to net method.
Disadvantages	- May miss opportunity to reduce tax burden if taxpayer doesn't itemize deductions or take advantage of tax credits.	- Increases taxable income and may result in higher overall tax bill.