Recurring invoices are often used for long-standing partnerships or repeated payments. They have plenty of benefits for both sides and are the go-to for many businesses. As a small business, how can you make use of them, and why should you?
What can you gain from using recurring invoices?
Recurring invoices offer a wide variety of advantages when used correctly. Examples include a healthier cash flow or better client relations.
Improved cash flow
How can implementing recurring invoices improve cash flow?
Implementing recurring invoices allows you to bill on the same date each month. By doing this, the client will be expecting a bill on that specified date.
Furthermore, it’s a good way to weed out the clients who won’t pay. As you invoice for the work done each time, it’s perfectly ok to refuse more work if they don’t pay on time.
Less time spent on admin
Invoicing increases the amount of time spent on admin, recurring invoices help you cut this down.
By using E-invoicing, you can now automate recurring invoices that remind the client when they need to pay. This means you can relax after the first invoice and let software like the Invoice24 app handle things for you.
With the time saved, you can easily put more into expanding your business. That hour spent sorting invoices can now be spent writing and editing posts for the blog.
Recurring Invoices Improve client relations
You will find it easier to maintain relationships with your clientele.
This is due to there being no discrepancies or disagreements, the price will be negotiated at the start. This assumes you have a scope of work written up beforehand and have discussed the terms. Keep in mind that as time goes on, you may consider changing these terms and you should, people grow and improve, warranting a higher rate of payment for work done. In this case, it really is as simple as just stopping the payment in order to start a new recurring invoice.
With all of these benefits, it’s easy to ask why recurring invoices aren’t industry standard. That comes down to one simple question.
Do recurring invoices fit the business
You need to consider whether or not recurring invoices fit the service you provide.
Needless to say, not all businesses can use recurring invoices indefinitely. For example, If you’re a contractor, it’s doubtful that you are billing the client for the same job every month. Same for electricians, carpenters, plumbers and so on. Services that aren’t repetitive should use non-recurring invoicing for the best results.
If the business model is suitable, with products such as blogging, marketing, general admin, etc, then you can use recurring invoices. Recurring invoices will benefit you massively, assuming you are working for a client as a sole trader. However, If you aren’t using them, it may take some effort to transition. This is because the client now has to pay you through planned, recurring payments, which some clients don’t want to do.
Keep in mind, that the client will often not accept this method if the work you do isn’t constant. You may only have time for one client in this case, so be sure to price yourself correctly.