Online invoicing adds a huge amount of value to your financial processes. The more streamlined your invoice process is, the less time you and your team spend on admin duties. And the quicker you’ll get paid – making your cashflow position healthier as a result.
Valued Accountancy understand this. As a cutting-edge cloud accountancy firm and tech consultancy, they know how cloud solutions, financial technology (fintech) and business apps can facilitate a deeper level of advice for their business clients – with efficient online invoicing tools being a key building block in creating the ideal business system for your company.
We caught up with Darren Glanville, Head of Operations at Valued, to find out more about the power of online invoicing as part of an integrated cloud system.
The key value of online invoicing
The traditional approach to invoicing can be a long-winded and inefficient process. Manual invoices need to be raised, printed out, posted out to your customers and then chased up if payment isn’t received by the agreed due date.
So where does Darren see the true value of moving this process over to online invoicing?
“First and foremost, the advantage of moving to online invoicing is speed. You have to look at the benefits from a number of angles, but first of all is the speed and efficiency point of view.
If I do a job on the first of the month, how quickly am I then going to bill out for that job? Am I going to leave it to the end of the week? To the end of the month? Some business owners will sit down and spend two days doing all that invoicing in one go at the end of the month – and that means there’s 30 days where you don’t have cash in the bank.”
The time post-completion and pre-invoicing is just dead time – and moving things to online invoicing speeds up when the invoice goes out and, crucially, gets you paid faster.
Setting the right payment terms
So with 24/7 mobile access to your invoicing system from a cloud system such as Xero, QuickBooks or Sage, you can start invoicing customers for completed jobs as soon as they’re done – starting the invoicing and payment cycle far earlier.
But Darren believes many businesses need to rethink their payment terms too:
“There’s the question of why everyone defaults to to the same payment terms. People get stuck into this cycle of payment having to be 30 days. Why can’t it be 7 days, or 14 days? Back in my Xero days, we ran a whole campaign urging people to change their payment terms from 30 days to 13 days, and that had a big impact on when businesses get paid.
The mindset goes along the lines of ‘I’ve done the work, so at some point I’m going to invoice for that work’. But if I’ve done that work, why can’t I send you that invoice straight away and get paid in seconds? That’s when the benefit of using online invoicing, invoicing apps and doing it all from a mobile device come in – it removes all the obstacles to getting paid,”
Choosing the best payment method
Getting your bills out faster creates some real efficiencies for your financial processes. But to really keep the process ticking over, and cash flowing into the business, Darren is clear that you also need an effective payment gateway.
“It’s not just about getting the invoice out to the client; it’s about how you then take that payment from the customer. Are you going to take payment with an old-fashioned cheque? Or are you going to link to an online payment gateway, like GoCardless or Stripe, and have a button on your online invoice that says ‘Pay now!’?
Using these fast online payment methods makes payment simple and removes all the barriers for your customers to easily do business with you.”
Cloud platform or external app for your invoicing?
All the main cloud accounting platforms have online invoicing features built in, with Xero, Quickbooks and Sage all including online invoicing as standard.
But does Darren believe the invoicing features within these cloud accounting systems cover all the bases when it comes to creating the ideal invoicing process for your business?
“At Valued, we’ll put all our clients on to Xero – and that’s a decision we make very early on. If they have an invoicing process where they use an external app like Harvest, or one of the other invoicing apps, that’s fine and they can raise their invoices in that application. But we’ll always want to have an integration with that invoicing app, so we can pull that data back into our practice version of Xero.
Having that integration, with your data flowing between solutions, is vital. It makes it easier to track your time, cost the job and see your expenses for a particular project, so you can invoice out accordingly – and some businesses will want to do that all in one application.”
Tracking cashflow, performance and KPIs
Having your time tracking, invoicing, cashflow and cost management all integrated and working together gives your real transparency around your performance – and, ultimately, knowing which jobs are turning a profit (and which aren’t) is an important key performance indicator (KPI).
When working with their clients, Darren knows how vital it is for the owner and management team to be able to break down each job and see how it’s performing:
“With something like WorkflowMax you can pull the information out around how profitable a job is, with your costs, your purchase and your billed time all down in there. And with a financial reporting app, you can give people a more holistic view that tracks those KPIs across a project.
This is where Fluidly are really cracking this. What you have is a cashflow app that also has the debtor management system built in, with reporting on a per-invoice basis. Some of the KPI reporting apps don’t let you get down to this granular level around the invoicing and debts. When you have an invoice out there for £10,000, that’s a big lump of cash to have coming in on a particular date. So to be able to say, at that granular level, exactly when that invoice will hit your bank and see the impact that it has on your cashflow – that’s huge!”
Fluidly as your financial mastermind
Fluidly’s Intelligent Cashflow engine brings together the AI-powered cashflow forecasting, debtor tracking and cashflow management features your business needs to keep on top of the key financial numbers.
And by working in close partnership with your accountant and business adviser, you have all the reporting, forecasting and budgeting tools you need to keep cash flowing in – giving you the liquidity you need for the next step in your business success story.