Invoicing once monthly is the invoicing method I used early on in my career. Sending one invoice per month had absolutely disastrous results. I was waiting for weeks to get paid in one lump sum by clients. I had to be meticulous with business expenses and personal expenses to make sure I didn’t run out of money throughout the month before I got paid again.
Invoicing more than once per month changed my life for the better. Suddenly, I had more cash flow throughout the month to invest in my business and to give myself a nicer paycheck. I’ll never go back to billing monthly and I always suggest that freelancers and online business owners take a look at their invoicing strategy for these reasons.
It helps your cash flow
Billing only once per month can spell disaster if a client pays late. Imagine you’re waiting all month for a $5,000 payment to come through and it never does. You have to spend the next few weeks following up with the client and your bank account suffers. During this time you may have to dip into savings to pay your own business expenses and contractors.
Billing more than once a month makes it so money is regularly coming in and there are fewer crises. Some of my clients even pay me when the project is complete so it can be as often as a weekly basis. If weekly is too often, consider billing at the beginning and the middle of the month at least. Give clients a heads up that you’re updating your payment terms.
It can be easier on your customer’s budget
Invoicing more often isn’t just helpful to you it’s also helpful for your client. I hire contractors fairly regularly. I work with writers and web developers on my site. Each of them invoice me beforehand or periodically. Paying in small sums is better for my budget than paying a huge amount at the end of the month. I’m happy to pay the people I hire more often knowing that it’s helping my budget and it’s also keeping the contractor happy.
It sets a precedent
Invoicing clients more often gives you some leverage and sets the expectation that you expect to get paid periodically for your work. If one of several invoices is not paid during the month, you can stop doing work until you’re paid (depending on your contract). If you only send invoices once per month and an invoice goes unpaid, you will have done an entire month’s worth of work without payment. An unpaid invoice for work you did over an entire month can be devastating.
You’ll benefit from sending an invoice more often
Billing once per month may make sense for your cable or wireless company. But when it comes to running your own business, invoicing more than once a month can save you from a pinch. Money from clients flows in for me throughout the month which helps me pay myself and others I hire.
By Taylor Gordon for Due.com.