Episode 13: Cash In, Stress Out: Simplifying Your Invoicing Process

Welcome to CreativeMind Smart Money, the podcast where creativity and business smarts collide. I’m your host, Samantha Eck, bookkeeper, business coach, and your go to guide for building the creative business of your dreams. Whether it’s mastering your money, streamlining your systems, or growing your business, I’m here to share insights that empower you to thrive.

Plus, I’ll be bringing in industry experts to dive into all aspects of entrepreneurship, so you can turn your passion into profit without losing your creative spark. Let’s get started.

You’re listening to the Creative Minds Smart Money Podcast, the show where we talk about turning your creative passions into profit.

And I’m your host, Samantha. And today we’re diving into a topic that’s close to every entrepreneur’s heart, invoicing. A crucial but sometimes overlooked part of running a business. If you’re not invoicing right, you could be leaving money on the table, delaying payments, and stressing yourself out. But with the right system in place, invoicing can be as smooth as butter, giving you peace of mind and steady cash flow.

So buckle up, we’re about to transform your invoicing game from chaotic to cool.

Let’s start with some invoicing basics. I know, I know, this isn’t the glamorous side of your creative empire, but trust me, it’s not. It’s the key to keeping that empire running. Let’s break down the best practices for invoicing because if you do it right, it’s like setting a financial boundary that lets your creativity flow freely.

First things first, your payment terms need to be crystal clear from the start. Before you even send that first invoice, you should discuss and agree upon the terms with your client. Are they paying you up front? Is there a 50 50 deposit split? Do they have 15, 30, or 45 days to pay you? Pro tip, net 30 is pretty standard, but if you want to get paid faster, net 15 or due upon receipt can speed up the process.

Just make sure these terms are spelled out in your contracts and visible on your invoices. If you’re a service provider, I’m of the mindset that you should be charging for your services before you even do any work. You don’t want to be caught doing work that will not end up getting paid for. I’ve seen it time and time again where service providers will do the work and then get payment afterwards.

And then they’re left in the dust because someone refuses to pay them. So instead of doing that, make sure you’re getting paid upfront so that you can ensure that you’re getting the money that your business needs to run. If you’re someone who is doing a product or something like that and you want to offer payment terms, that’s totally fine But just keep that in mind when you’re setting your payment terms that you are going to risk your cash flow by having things be spaced out so much.

The second thing that you need to watch out for is consistency with your due dates. Consistency obviously builds trust. If your clients know when to expect your invoices, they’re more likely to be prepared to pay you. Pick a day, whether it’s the first of the month, the 15th, or right after the project finishes, just make it a habit.

invoicing rhythm makes you look professional For me, having a set recurring payment setup is how I run my business. On the first of every month, my clients have an automatic ACH that is drafted with their monthly dues.

It’s paid. There’s no need for them to worry about having to come back and pay it. It’s already handled. That might not work for everybody’s business, or everybody’s mindset, or the way that they do their business, but just making sure that you’re consistent and saying, Hey, my invoices are due on the 1st of every month.

My invoices are due on the 15th every month is going to be so important for you and your business. The third thing you need to do is automate whenever possible. You really didn’t start a business just to spend all day sending emails and chasing payments. Automation is your new best friend. Use tools to send invoices automatically, set up recurring billing for retainer clients, and schedule follow up reminders when payments are overdue.

We’ll get into specific tools in a bit, but I can’t stress enough how much easier life gets when you automate this. Obviously, depending on the tool that you’re using, you’re going to have different sorts of automations. But if you’re like me and you set up recurring billing, your clients are already getting notified of when they’re getting paid.

So that’s already good. But if you need to have follow ups or things like that, that’s also very important. So setting up those automations and knowing when you’re getting your money are two very important things. Consistency, clear payment terms, automation. The next thing we want to do is talk about Being polite but firm with late payments.

The dreaded late payment. If a client doesn’t pay by the due date, follow up with a polite yet firm reminder. You want to appear professional, but you also want to appear like you know that you need the money. A little kindness can go a long way, including a quick message like, Hey, just a friendly reminder that payment was due a few days ago.

Let me know if there’s anything I can assist you with. And here’s a pro tip. If you’re dealing with chronic late payers, consider adding late fees. It’s not fun, but it can definitely light a fire under your client’s butts who are habitually late. Sometimes a 1. 5 percent charge per month can be effective, but be sure to communicate this policy ahead of time.

Have that stipulated in your contract and make sure that’s really in there. I know a lot of people don’t put that kind of thing in their contract, but that’s so important, is your payment terms. In your contracts, you should have the terms of when they need to be paid.

So whether that’s net 15, net 15, due upon receipt, however that’s paid. And that is legally binding. That person knows that they need to pay that. The next thing you need to do is, have that due date in there so that once you have that consistency, it’s on your invoices, your clients know that they need to be there and they need to pay that by that due date.

The third thing you need to do, like I said, is notice, note that automation. So if you’re going to be pulling those payments automatically, note that in your contract and let them know that those payments are going to be pulled automatically at the 1st of every month, the 15th of every month, things like that.

And then also note those, those firm, but late payments, let them know that, Hey, if you’re going to be paying me late, you’re going to get a fee and just understand that obviously you can have a grace period. So if someone’s late and you want to say, I want to give them a five day grace period, that’s totally fine, but don’t be lenient.

This is your business. This is your cashflow and you need to ensure that you’re getting paid properly. So make sure that you’re, pushing the bar, noting that in your contract so that you have. right amount of money coming into you. You know when your money’s coming in, you know what’s going on with your business and you’re not trying to run around and chase payments.

You’re creatives, right? Your invoice doesn’t have to be boring or generic. You can use your logo, your brand colors, a language that reflects your personality. After Every touch point with a client is an opportunity to reinforce your brand. Plus, a polished invoice shows you take your business seriously.

So make sure your invoice has these essentials. Your contact info. Your client’s contact info. An invoice number for easy tracking. The date of issue and due date. Breakdown of services and products, payment methods you accept, any late fees or terms related to overdue payments. Bonus points if you like to add a little thank you at the bottom because it touches people in ways you can never imagine.

And I also want to note that when you’re adding your client’s contact info, you want to be really crystal clear about all of this. Don’t just put in their name, put in their address, put in their phone number, put in their email. That way you have all this detail in there and you can know exactly who you’re talking about.

If you ever need to go back and look at an invoice or if your bookkeeper does, whoever you’re working with can go back and look at that and understand it. All right. So you’ve got invoicing practices in check. Let’s talk about tools because let’s face it. No one wants to send your invoices manually, especially when there are systems that can do it for you while you’re sipping coffee or working on your next big idea.

First of all, we have many different ways that we can process invoices and create invoices. So I’m going to go through a few of these and talk about them. And you guys need to decide, just like I said with your bank account, just like I said with your accounting software, what works best for you. I want to make this crystal clear.

As a business owner, Nobody has any right to tell you what to use and what not to use. If you don’t feel comfortable with something, that is completely up to you to determine what works best for you and your business. You need to have as much knowledge about what’s going on in your business as anybody else who you would hire, whether that is a service provider or someone else.

So if you like a certain platform, stick with your guns and understand that that is a platform that you’ve chosen and whoever works with you needs to work with that. So diving in, The first one that we have are some heavy hitters. It’s accounting software that doubles as invoicing and if you’re already using these for bookkeeping you’re halfway there so you don’t have to add another subscription to your docket.

Some people don’t like the invoices in these systems and that’s totally fine but let’s talk about a couple of them. The top one is QuickBooks. It’s pretty much the go to for a lot of small businesses because you, again, you don’t have to add a new subscription to your budget. You can create custom invoices, set up automatic recurring billing, and integrate payments seamlessly.

Plus, it syncs with your bank accounts to give you an accurate picture of your financials in real time. Pro tip, you can now add a Pay Now button to your invoices, allowing clients to pay via credit card or ECH, which definitely speeds up the process.

Xero is another strong contender, that’s X E R O. Xero allows for customizable invoicing, automatic payment refiners, and even the ability to add discounts or early payment incentives. Like QuickBooks, it’s great if you need an all in one solution, but that also handles your accounting. Plus, its user interface is Chef’s kiss.

FreshBooks is especially popular with freelancers and creatives. Its interface is super intuitive and the invoicing features are on point. It lets you track time and expenses, which can be handy if you’re billing clients for project hours. You can also automate late fees and payment reminders, making those tough conversations a little bit easier.

If you’re not using FreshBooks for your accounting, I would not suggest using FreshBooks because it is quite costly. QuickBooks and Xero already have invoicing built into their products. Monthly subscription. So those are two really great options. If you’re looking at using your accounting software for your billing now If you’re like, ah, I don’t want to use QuickBooks.

I don’t want to use Xero. I don’t use FreshBooks. That’s totally fine Let’s talk about some other options for you. You have payment processors, Stripe, PayPal, Square And these are all ones you’ve probably heard of before but you’re like, oh, what are they? If you don’t want to use QuickBooks to process payments, that’s totally fine where Stripe, PayPal, and Square will come in. Stripe is one of the most popular choices for online payments because it’s super flexible. It integrates with almost every invoicing tool, accounting software, and even CRMs. Stripe also supports a variety of payment methods such as credit cards, ACH, Apple Pay, Google Pay, you name it.

It even lets you accept international payments, which is great if you have clients all over the world. Now, Stripe has its own issues. I’m not going to get into those in this episode, but I do want to let you know that Stripe is a really great option if you are looking for something that you want to just do.

have someone pay you. You can also set up those recurring payments, things like that. Stripe is a little bit higher on the end with fees. So if you’re not a fan of fees, I would definitely stay away from Stripe. PayPal is another solid option, especially for freelancers. It’s widely known and trusted, so many clients will already be familiar with it.

The downside is that again, PayPal’s fees are a little bit higher than Stripe’s. It’s a convenient tool to get paid quickly, and it integrates with many invoicing tools and even accounting softwares. However, I will note that PayPal is just simply not the best option anymore.

When you’re thinking about good invoicing software and software that you want to integrate well, PayPal has just fallen to the wayside with this kind of thing and it’s not the greatest for you anymore. Square is typically associated with point of sale systems. for in person payments, but they also offer online invoicing.

It’s great for small businesses and creatives who might be doing pop up shops, workshops, or other live events where you need to get paid on the spot. However, they also do have an online element and Square’s invoicing features are easy and clean to use. I’ve worked with website designers who purely use Square and use Squarespace for their website, so it’s a fantastic option for you if you’re, that’s something you’re looking to use.

Now, like I said, payment processors are great, but obviously they each come with their own nuances and different processes and fees. So if you’re really looking to cut down on some sort of subscription or something like that, stick with your accounting software. Also, of course, you don’t have an accounting software, but just totally fine.

Use your payment processor, your bookkeeper or whoever. you work with in the future will thank you because they will at least be able to go through your payment processor and add those payments for you. The next two I want to talk about are CRM systems that also include invoicing. And these two are HoneyBook and DubSado.

If you want to level up your invoicing game, while also managing client relationships, CRM tools like HoneyBook and Bipsado are where it’s at. These tools let you streamline not just your invoicing, but your entire client process from onboarding to payment. HoneyBook is fantastic for creatives and freelancers who want everything in one place.

You can send proposals, contracts, and invoices all through the same platform, plus it automates follow up emails and payment reminders. Plus, it automates follow up emails and payment reminders. It also integrates with payment processors like Stripe and PayPal, making it super easy for clients to pay you without the extra steps.

I will admit, as a bookkeeper myself, I use HoneyBook for all of my invoicing, not invoicing, for my proposals, contracts, and yes, that first invoice. I have a different payment processor for my regular payments specifically because it charges me a little bit less on payment processing fees. I want to note something, though, as I’m talking about these payment processing fees.

Payment processing fees are a cost of doing business. At this point in your business, it’s unavoidable. It’s going to happen. There’s nothing that you can do to avoid payment processing fees. The only thing you can do is either integrate them into your, like, account for them when you’re pricing your products or eat them.

It’s as simple as that. Payment processing fees are here to stay. They’re not going away. Just make sure that you are understanding them. Gupsado is another CRM powerhouse with customizable invoicing features. It’s perfect for businesses that offer packages or retainer services, allowing you to create payment plans, automated payment providers, and even track leads.

Plus, you can design your invoice templates to match your brand, which is a huge plus for us creatives. The difference between HoneyBook and Dubsado here is really down to the UI and the level of skill that you have when it comes to creating invoices. If you’re looking for something a little bit less complex, you might want to lean into HoneyBook.

But if you know how to code or you know how to customize things in a really unique way, Dubsado might be the place for you. You can also obviously, of course, hire someone to help you build out your Dubsado and your HoneyBook to match your brand and overall feel.

So there you have it. A crash course on mastering invoicing like a pro.

From setting clear payment terms to choosing the right tools, you know everything you need to streamline the process and get paid faster. Remember, invoicing isn’t just about sending a bill, it’s about creating a system that works for you so you can focus on what you love doing. If you found this episode helpful, don’t forget to subscribe, leave a review and share with your fellow creative entrepreneurs.

As always, you can find more resources and connect with me at the links in the show notes. Farewell, fellow travelers.