For small and medium businesses (SMBs) that provide services, invoices remain the primary means of requesting payments and, therefore, the lifeblood of success. Data from Xero Small Business Insights shows that payment times improved for small businesses that invoice customers, providing some modest relief during times of slow sales growth.
But invoicing isn’t without its negatives. For one thing, invoice processing cuts into the daily task lists of small service businesses. According to Sweating the Small Stuff: The Impact of the Bureaucracy Burden, a report by Plum Consulting, SMBs spend about 17% of their total manpower on administrative tasks — with the second and third-leading task types being generating invoices and processing payments, respectively.
Further, whether your business is in accounting, housekeeping or construction, invoice processing isn’t always a breeze. According to a HubSpot Research SMB survey, 27% of SMBs admitted that they have a hard time creating and sending invoices.
It doesn’t end there. It turns out that invoicing issues contribute to the revenue-flow issues that service businesses seem to face perennially. A QuickBooks-commissioned survey of U.S. businesses noted that 89% of midsized businesses report that late payments prevent growth, leading to multiple follow-ups via email. It also notes that 72% of businesses said that payment processing also impacted their ability to grow their business.
Disclaimer: This content is for informational purposes only and should not be construed as legal or financial advice. Always consult an attorney or financial advisor regarding your specific legal or financial situation.
What is a typical invoice processing workflow?
Although invoice processing seems like a straightforward procedure, it can pay off to examine the steps involved in order to improve it.
- Receiving an invoice. Invoice processing starts after you send your invoice to your customer. Once your customer’s accounts payable department receives your invoice, they enter it into their system and record it in the general ledger.
- Checking for accuracy. Your customer can then check your invoice against existing purchase orders and delivery receipts to ensure it’s legitimate and accurate. Your customer can then pause the invoice process in the face of any discrepancies between the amounts shown on the purchase order or delivery receipt and the invoice itself until the issue has been resolved.
- Approving the invoice. Once any issues are cleared up, your invoice can then be formally approved for payment. This approval process varies per company, but is now generally carried out digitally, which minimizes the chances of the invoice being neglected or lost.
- Paying the invoice. With your invoice logged and approved by your customer, the process of invoicing can move on to the final stage: payment. Your customer’s AP department processes each payment according to the payment terms you’ve agreed to.
What your invoicing process signals to customers
Beyond the data, your invoicing reflects some aspects of how you run your service business. It doesn’t matter whether you service businesses or consumers, deliver on a fixed-price or time-and-materials basis, or work on retainer — your invoice processing clues customers in to how your business has evolved, what you’ve invested into it, and where it’s going.
Do you send paper or digital invoices? Via email or snail mail? Your invoice delivery method is just the tip of the iceberg. Other important factors in your general invoice processing include:
- Invoice essentials. Most invoices include your business name, invoice date and number, an itemized list of rendered services, and total amount.
- Invoice differentiators. Along with the above essentials, your invoice can also include elements that set you apart from your competition, including detailed service descriptions, accepted payment methods, your logo, and your business tagline. The right invoicing solution also enables you to email invoices from a specific and relevant business email address, instead of the more generic and spammy “info@company.com” or “contact@company.com”
- Timeliness. Getting paid on time depends on how soon you send your invoices, especially if you need to send them regularly for recurring services. When you automate the way you deliver your invoice, you increase your chances of flowing in more timely payments.
- Payment options. This one’s simple. More ways to pay often mean quicker payments and more convenience for your customer, which builds better relationships.
From pain point to payment: How GoDaddy Invoicing benefits your service business
You may find some of the following invoicing pain points stand out sharply to you as you provide your services to customers. Others may seem incidental, but you may find them costly when you consider invoice processing holistically. When you streamline invoice processing for your service business, you break out of many painful patterns that can cost you both time and money:
| Invoicing Pain Points | GoDaddy Invoicing Benefits |
|---|---|
| Properly invoice processing for services takes time. | Make your invoicing effortless. With GoDaddy Invoicing, you can create and send invoices via email or a payment link in just a few steps. Easily select recipients from your customer list, add details like line items, payment details, discounts, and taxes, and send in one click. |
| Customers can forget to pay—and you might forget to remind them. | Automate and get paid on time. Use GoDaddy Invoicing to keep track of paid and unpaid invoices, and preset automatic reminders to reduce the risk of late payments. |
| Recurring invoices mean even more task hours. | Save time with flexible billing. GoDaddy Invoicing lets you send one-time or schedule recurring invoices up front and save customer payment cards on file for more predictable cash flow. |
| Generic invoices don’t stand out. | Look professional. With GoDaddy Invoicing, you can send invoices from your business email, customize your invoices and emails with your brand, and connect and host your invoice checkout page on your GoDaddy domain. |
| Fewer tools make payments more inconvenient. | Get both in-person and remote payment capabilities. Accept Tap to Pay on the GoDaddy Mobile App for contactless payments on site and use Virtual Terminal for payments by phone. No extra hardware needed! |
| You shouldn’t have to pay too much in card processing fees. | Enjoy simple, transparent pricing. Accept credit, debit, Apple Pay and Google Pay payments for a discounted rate of 2.8% + 30¢ per online invoice transaction with GoDaddy Invoicing Plus (Customers that don’t have Plus will pay 2.9% + 30¢ per online invoice transaction). |
| Your invoicing should be centralized. | Manage everything in one place. GoDaddy Invoicing lets you process your invoices and payments from one dashboard. |
Why branded invoicing matters
Branded invoicing shows us an important way to blend your marketing and sales tactics into your daily operations. Using branded invoices helps ensure that this key interaction with your service business reflects your brand identity and helps enable a cohesive customer experience. These invaluable payment tools reinforce your professional image and can significantly strengthen your relationships with your customers.
The bottom line on your invoicing
Invoicing should be as pain-free as possible, and your invoices should reflect your professionalism and pride in your company. GoDaddy Invoicing makes invoice management easy for your service business. It enables you to create and send branded invoices in minutes so you can get paid on time.
