What Does Client Billing Mean?

Client billing is a process of invoicing clients and urging them for the due payment on their purchased service or product. Companies go for the billing process to ensure they receive on-time payments. This process covers creating and sending invoices to the client. Companies have smooth payment flow and are economically strong with a strong client billing process.

How to Bill a Client? Follow These Steps

When you think about how to bill a client, you must follow the below steps for the best billing experience.

1. Finalize the Invoicing System

Before you share your bill with your client, it is crucial to have the right invoicing system, depending on the contract you signed with your client. There are many invoicing systems available for you, listed below:

1.1 Document Templates

These are ready-to-use templates with predefined fields. Professionals can easily download them and create an invoice while filling out the details. These templates are accessible in PDF, Word, Excel, Sheets, or Docs. However, this approach is prone to errors because the user fills in the information manually.

1.2 Billing and Invoicing Software

Billing software makes the billing process easy, fast, and accurate. Using such platforms, professionals can quickly create invoices and track and manage overall billing. However, invoicing software is not cost-effective. So, mid-size company owners can use this option.

1.3 Time Billing Software

This invoicing system is ideal for those who work on per-hour projects. Time billing software records the time of each task and helps you to track your billable time. In this way, you can easily create an hourly rate bill for the time spent on the project.

2. Choosing a Custom Invoice Template

Invoicing software like Moon Invoice provides 66+ customized invoice templates. Professionals can modify these templates to create the desired invoice. They can change the invoice layout and color theme. They can fill in the details like invoice number, company name, logo, and contact information. Overall, they can craft the most suitable bill format for clients.

3. Creating an Invoice

You have customized and finalized the invoice. Now, it’s time to create the invoice by filling in the details, which are as follows:

• Invoice number, invoice date, and currency
• Purchase Order number
• Company name, address and contact number
• The client’s name, address, and contact information
• Description of the offered services or products along with the cost breakdown
• Payment terms
• Signature of the authorized person

Invoice Number – It is a distinctive number assigned to each invoice upon creation. It is very helpful in tracking invoices.

Invoice Date – The invoice date is the date on which the invoice was released.

Currency – Mention the currency of your client’s region when dealing with international clients.

PO Number – PO number is a unique number for purchase orders, which is especially important for large corporations.

Company Name, Address and Contact Number – It represents your company’s name, its correspondence address and contact number.

The Client’s Name, Address, and Contact Information – It refers to the name of your client, his correspondence address, and contact details. Make sure that you mention the address with the PIN code.

Description of the Offered Services and Products – The services and products section should contain the details of the offered services and products in a presentation format. It should contain a cost breakdown.

Payment Terms – Payment terms reflect the conditions that bind customers to make the payment in a specific period. Some payment terms are as follows:

• Net 15: This payment term specifies that the customer has 15 calendar days to send the payment. Kindly note that the counting of these 15 days is different between the digital and offline receipts of invoices. The day starts when you send the invoice, in case when you send an invoice digitally. In the offline mode, the day counts when the customer receives the invoice.
• Net 30: This is identical to net 15 terms but it offers 30 calendar days to pay bills.
• Upon Receipt: In this payment term, the customer has to make the payment as soon as receiving it.

4. Sending of Invoice

Once your billing format for the client is ready, it is time to send it to the client. Advanced invoicing software like Moon Invoice provides an online mode to send invoices through WhatsApp or email. Professionals can send invoices by any mode. Moreover, the software also provides the option to take a printout of an invoice. This simplifies the process of sharing the invoice in hard copy form.

5. Follow Up Invoice

Just sending an invoice is not enough for effective billing. Many businesses face late payment challenges. You must also keep following up on your invoices to get paid faster. In case of late payment, you must remind your client by email or call.

You must follow a systematic approach to following up on your bills. Never send a payment reminder message the day after sending an invoice. You can send it a few days in advance of the due date. Also, resend the reminder if you haven’t received the payment even after the due date.

What Are the Methods to Follow up an Invoice?

There are various methods to follow up on your invoices. Some of them are as follows:

Email Sending

Sending reminder emails is a common approach among professionals. You can send an email to your client and provide all the details of the outstanding invoice. Here, you must be sure that you use professional language and tone.

Direct Call

When you haven’t heard anything from your client after emailing, it is time to make a direct call to your client. This helps to establish a direct connection with your client and helps to resolve any confusion that exists during the billing process.

Automation

Professionals can automate their payment reminders through software like Moon Invoice. It automatically sends payment reminders to the client. Thus, it eases the payment reminder process.

Be Flexible

Offering discounts and other incentives to the client can be the right solution to receiving late payments. While following up on the invoice, you can offer a discount that can attract customers and be the reason for making the payment.

Legal Move

If all the attempts failed, then legal action can only be the solution. Professionals can seek small claim courts or civil courts depending upon the amount. Please note that legal actions can negatively affect your client relationship and may result in client loss. So, it is always better to take legal action after proper analysis.

What Is the Value of Client Billing?

To Gain Client Trust

A well-structured billing process is always good for gaining the client’s trust, which is important for business success. Your repeat business chances are very high when you close your deal with happy clients. Once you have a streamlined billing structure, it is easy to convert your billing into recurring payments and smooth cash flow.

Legal Protection

Systematic documentation is good for legal records. The invoices are valuable evidence to support your claims. Also, it acts as a safeguard and protects your claim.

Easy Taxation

A good billing process helps analyze income patterns and clients’ purchasing behavior. Professionals can identify financial trends and understand taxation.

Save Time

A systematic and automated billing system saves you time. So, you can invest your time in other crucial activities of your business.

Common Client Billing Mistakes to Avoid

Mistakes in client billing are the major reasons for delayed payments. So, take care of the listed mistakes when you prepare a billing format.

Missing or Incorrect Information

If your bill contains incorrect or missing information, your billing process will be affected. It is because it creates confusion or disputes that will delay your billing process. Additionally, it negatively affects your client relationship. So, it is always better to focus on information when creating billing formats for clients.

Late Invoice Sending

Invoice sending should be on time. You will be entirely accountable for any delays in sending invoices.

Complicated Language in Payment Terms

If your payment terms language is complex, it will be difficult for the client to understand. Thus, it will affect your billing process. Keep the language as easy as clients understand it well at once.

Relying on One Payment Option

This is a very common mistake of professionals. They provide only one payment option. Offering multiple payment options is always a good approach. So, offer various payment options whenever you bill clients.

Not Following up on Undue Payment

It is crucial to follow up on all pending invoices. However, many professionals give less care to this approach and do not keep a strong following of invoices. This leads to mismanagement of your cash flow.

Not Keeping a Copy of the Invoice

While sending invoices to your clients, you must keep a separate duplicate copy of the same. This helps you to easily track your invoices and resolve disputes in case of an emergency. So always keep a copy either in digital form or a hard copy.

Wrapping Up

So, here we are at the end of our discussion of how to bill a client. Remember, a systematic billing cycle is the best medicine for your business’s financial growth. Manage it carefully to keep your business in a robust economic domain. You will never be a victim of late payment when you follow a smooth and systematic billing process.

The billing format should be simple, professional, and clear. So far, we have uncovered the meaning of client billing, effective steps to create bills, and common mistakes to avoid while invoicing.

Hope it conveys valuable information for your billing strategy. Become a Moon Invoice user to experience the best invoicing process.

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