Small business does not always mean providing services and getting paid for that. You need various supplies in terms of products or services to keep your business running. Now, if you purchase a particular product or receive a service from a vendor, you need to pay the money. This is where invoice payment comes into the picture. Often you would come across such phases where you need to clear your invoice payment.
Here in this article, we will discuss invoice payment and how to make an invoice payment for the easy functioning of your business.
A quick insight into the article:
Keep reading to learn more!
What is an invoice payment?
Whether you are new to this business world or an experienced business professional, the term ‘invoice’ is common to all. And, why will it not be? Providing service and getting paid is the most basic concept of a business. While proceeding with your payment, you send an invoice to your clients requesting your payment clearance. But what about you making an invoice payment?
Yeah, you heard that right! For smooth business operation, you may need to buy supplies or get specific services from your vendors. To track the invoices for respective purchases, you need to implement a consistent invoice payment system to simplify your business accounting process. You need to settle down the invoices on time to avoid late fees and maintain a strong bond with your vendors.
How to make invoice payments on time
Running a business is not an easy task. You have a never-ending list of work every day and a packed up schedule. Amidst all these, you have your business expenses as well. You need to purchase certain business essentials to avoid any interference in the process. Eventually, you need to pay the invoices for your purchases on time. Here are some useful tips that would help you to make your invoice payments on time. Check out the below section to know more!
Recheck your invoices before you pay:
A little doubt is always beneficial, especially when it’s business. Recheck or review the invoices as soon as you receive them from your vendors. Adapt this process as a habit to avoid any misunderstanding. As the purchases are fresh in mind, it won’t take much time to cross-check. Rechecking the invoices also reduces the chances of your invoice getting misplaced.
Just for your added convenience, check out what you need to look for in the invoice that you receive from your vendors:
Invoice due date:
Mark it in your data book with the invoice number or vendor’s name, so that you don’t miss out on the payment deadline.
Cross-check the services or goods provided:
The invoice contains a list of services offered or products supplied with respective costs. Get your doubts cleared by checking out the list once.
It is fine that you have your calculation done. So check the total cost before you pay your vendor. If you face any issue with the amount, inform the vendor immediately before it’s too late.
Opt for the right payment mode:
Choosing the right and most convenient payment method makes your work easier. Verify from your vendor what payment method they accept. If they don’t have any specifications, then opt for the smartest option that suits your small business. If it is easier for you to go for a credit card option, go ahead! But make sure you don’t miss the payment deadline. Or else, you can even try out online transfer, or other modes of payment available.
Arrange your invoices as per your payment timelines:
You must be keeping a track of your paid and unpaid invoices. Follow the same and keep a track of the invoices that you receive from the vendors as per the due date. This makes your work more organized and would prevent invoices from piling. You can simply opt for an excel sheet to keep a record or involve a cloud-based invoicing system to maintain the invoice data. Figure out a suitable date for invoice payment if you receive multiple invoices at different dates of the month.
Create alerts to avoid missing out on invoices:
You wouldn’t like to pay a late fee, just because you missed the day due to some work. Well, try out this! Set reminders or create digital alerts for your invoices. This will help you track your invoices and notify you weeks before you approach the due date.
Automate your invoice payment:
Automate your invoice payment to ensure that your business never misses out on any invoices. If you have a recurring invoice, then you can automate the process, so that it gets deducted from your credit card or bank account at a specific date set by you. This way your invoices get paid automatically, and you stay tension less without worrying about missing the payment deadlines.
Process your invoice payment before the due date:
You may run a small business, but that does not mean you won’t have expenses. You may purchase products for business operations for which you need to pay your invoices on time. If you have analyzed your vendors closely, then you would find at least a few of them who will offer an early payment discount. Try to process your invoices before the due date so that you can avail a special rebate.
Opt for an invoice filing system:
Sticking to an invoice filing system is a smart way to avoid disputes on invoice payments. An invoice filing system helps to keep a track of the invoice details like payment amount, date, and method. Implementing such a methodology helps to monitor the payment confirmation details, which eventually smoothens your business finances by avoiding awkward situations.
How to pay an invoice?
Once you receive the invoice from your vendor, invoice payment is the immediate action that you take. But the question arises, how to pay an invoice? In the era of digital advancement, you have multitudes of options for invoice payment. Check out the below section to know what are options available, and choose the one that best fits your small business.
Automatic bill payment:
Online bill payment is the most suitable option that offers a tension-less payment procedure. This is a service that is offered by the bank that lets your small business pay off their bills easily. Moreover, this also saves a lot of time and effort. This method is much helpful for recurring payments and ensures that you are never late in paying your bills. You just need to make sure that you have a balance in the account. Well, if you are thinking about what could be the process for online invoice payment, take a look in the below section.
- Organize all the invoices that you need to pay and keep a note of the account numbers related to them.
- Go to your bank’s online payment platform and enter the payees’ names and account numbers to register it.
- Set a specific date as per your convenience for invoice payment. Note: The money will get deducted on the date mentioned by you.
- Select what type of payment you want- single or recurring.
- Reminders help you to track your invoice dates. Hence, set a reminder to never miss out on the payment dates.
Payment by cheque is an old-school method. It is safe and secure but time-consuming at the same time. Moreover, you need to be cautious while filling it.
Cash payments are a nice and easy way to pay off your small invoice amounts. But this is not a good idea if you are thinking of clearing your large invoices. The chances of theft or getting misplaced is high for this mode of payment. Try avoiding this payment method for huge amounts.
Online mode – credit or debit card:
The digital payment system has come up with credit card as well as debit card payment mode. Both ways offer you an easy and safe payment process. They provide a high level of security for online payments, which safeguards your data and gives a safe transaction.
This is also a safe and faster way of clearing your payments. You can pay the invoice amount through a mobile transaction that may involve a credit card, debit card, or even through various online platforms available as mobile apps.
Invoice payment is not anymore a tension. Now you know all about invoice payment and how to pay an invoice. Take out time, settle down all your dues and focus on your business growth without worrying about payment deadlines. What’s your take on this?