Why invoicing is about more than paperwork
Getting paid on time is one of the biggest challenges for small businesses. According to Xero's Small Business Insights data, late payments are consistently cited as a top cash flow concern - and the problem often starts with the invoice itself. A poorly structured invoice, sent at the wrong time or to the wrong person, is an invitation for delay.
The good news is that most late payment problems are preventable. These seven practices won't just improve your invoicing - they'll change how quickly money arrives in your bank account.
1. Invoice immediately - not at the end of the month
The single most effective thing you can do to get paid faster is to send your invoice as soon as the work is done or the goods are delivered. Every day you wait to invoice is a day added to your payment wait time.
Many small businesses batch their invoicing at the end of the month as a matter of habit. But if your payment terms are 20th of the following month, invoicing on the 30th means you're waiting nearly seven weeks from completing the work to receiving payment. Invoice the same day, and that drops to around three weeks.
Invoice from your phone on the job
CashManager Cloud lets you create and send invoices from any device. Finish the job, send the invoice before you leave - your customer has it while the work is still fresh in their mind.
2. State your payment terms clearly
Your invoice must state when payment is due - not just "payment due on receipt" but a specific date or a clear term like "payment due within 14 days of invoice date." Vague terms create wiggle room for slow payers.
Consider shortening your standard terms. Many businesses default to 30 days out of habit, but 14 days is increasingly common for small business work in New Zealand and Australia - and customers generally accept it without complaint. The shorter your terms, the faster your average payment time.
3. Get the details right the first time
An invoice with errors - wrong amount, wrong GST treatment, sent to the wrong email address, missing a purchase order number the customer requires - will be queried or rejected, adding days or weeks to your payment time. Before you send, check:
- The correct legal name and address of the customer
- The correct email address (accounts payable, not just your main contact)
- Any purchase order or job reference number the customer requires
- The correct GST treatment - GST-inclusive or GST-exclusive, with the GST amount shown separately
- Your bank account number for payment
4. Follow up promptly when payment is overdue
Most late payments aren't deliberate - they're the result of invoices getting lost in inboxes, being queued behind other payments, or simply being forgotten. A polite follow-up email or phone call on the day payment is due (or the day after) is usually all it takes.
The mistake most small business owners make is waiting too long to follow up - either out of discomfort with the conversation or a reluctance to seem pushy. But the longer you wait, the harder the conversation becomes and the less likely you are to get paid quickly.
Overdue invoices get harder to collect over time
Research consistently shows that the older an invoice, the less likely it is to be paid in full. An invoice 90 days overdue is significantly harder to collect than one 30 days overdue. Follow up early and often.
5. Make it easy to pay
The easier you make it to pay, the faster you'll get paid. Include your bank account number prominently on every invoice. If you accept credit cards or online payments, include a payment link. Some businesses add a QR code that links directly to a payment page.
Consider whether your payment terms match how your customers prefer to pay. If you're dealing with larger businesses, they may prefer to pay by direct credit on a set date each month - understanding their payment process and working with it (rather than against it) can reduce friction significantly.
6. Ask for deposits and progress payments on larger jobs
For any job that will take more than a week or cost more than a few hundred dollars, a deposit upfront is entirely reasonable - and most customers expect it. A 25-50% deposit protects you against non-payment and ensures you're not funding the work yourself.
For longer projects, break the invoicing into milestones. Invoice at the start, at key completion points, and on delivery. This keeps your cash flow steady and reduces the risk of a large final invoice being disputed or delayed.
7. Use software that makes invoicing effortless
Manual invoicing - whether in Word, Excel, or a basic template - is slow, error-prone, and hard to track. Good accounting software automates the repetitive parts: customer details auto-fill, GST is calculated correctly, invoices are numbered sequentially, and you can see at a glance which invoices are outstanding.
CashManager Cloud includes invoicing as part of the base plan, with automatic GST calculation, professional templates, and direct integration with your bank reconciliation. When a customer pays, the invoice is matched automatically - no manual chasing of payments through your records.
Need help setting up your invoicing workflow? Call us on 0800 707 111 - we'll get you set up properly from the start.