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How to streamline invoicing processes for professional service organizations

To truly be a professionally operating business, you need to make sure that your financial processes reflect this professionalism. A large part is being able to provide accurate and sufficient professional service invoices.

Reliance on spreadsheets can be overwhelming, but as your business increases, having a healthy financial department to streamline your invoicing processes, among other operations, is more than important.

We will discuss the basics of the invoicing process for professional services organizations and some of the more modern ways you can solve this problem to optimize your financial operations, something a growing business must consider.

What is an invoice?

If you are a business that provides a service, you need to give your customers a commercial receipt that documents the transaction.

Providing an invoice for professional services allows you to keep a record of your incomings and outgoings which can allow you to make accurate and informed analyses and projections for the future.

Why are invoices necessary?

If a business requests your services, they may need an invoice to claim business expenses.

It’s important to reflect professionalism in the way your business operates so that those you are dealing with get the right impression. Part of this is being transparent with your transactions and keeping a record of them.

What should a professional service invoice include?

There are a few things that an invoice must include to be recognized professionally and by other organizations, such as the tax office.

  • Terms – It’s important to outline the terms of payment, this includes any information relating to potential charges, discounts – financial terms that all parties must recognize for the transaction to be transparent.

  • Details of the company – Company name, address, and anything relevant for the transactor to find you if necessary.

  • Details of the customer – Name, address, and relevant details so you can contact them, but this is also useful for retrospective analysis of your customer base.

  • Description of services provided – This is useful so the customer can remember what they paid for, but it also allows you to keep tabs on what sells best.

  • Quantity of hours rendered for that service - This can help you optimize pricing and productivity in the future.

  • The price you charge for service, or the hourly rate for the service.

  • The total amount charged – This can be different from the hourly rate and include discounts, shipping, or other terms.

  • A unique and serial number – Each invoice should have its unique number, ideally in serial order, so that you can keep track of each invoice when necessary.

While this covers the basics of an invoice, this list is not exhaustive. Financial professionals have a lot to consider and require efficient and optimized systems to ensure that finances are recorded and dealt with professionally.

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Things to consider when invoicing

Being able to create a sufficient invoice is its task, but ensuring they get paid on time, are organized correctly, and exist within an organized and efficient system can be just as vital for healthy financial operations.

  • Services over a long period – Your company might look to create a contract with a customer to provide a service over a longer period than can be measured in hours. In this circumstance, you may only provide an invoice when the customer no longer requires the service.

You may choose to invoice your customer at the end of the contract, or you may do this over a certain period, for example, each quarter.

It’s important to treat each customer the same, and it can require a high level of organization to ensure that the invoice is accurate over this longer period.

  • Including a ‘pay by’ date – No matter the size of your business you may want to include an actual date that you require your customer to pay you by. This can ensure that you don’t have to chase down your customers to be paid, and you may even include charges if they don’t pay by this date.

  • Automating the process – What should be clear is that invoicing requires a large amount of organization, efficiency, and productivity, all of which add up in labor costs. One small human error, which everyone is prone to, can lead to an operational meltdown and even potential for financial loss in some cases.

With automation, you can rely on software to hugely reduce data consolidation times and labor costs, as well as increase the efficiency and operational success of invoicing and many other financial processes. When you can automate these operations, this allows for other useful financial processes such as projections and analysis.

How Unit4 can optimize your financial operations with an integrated FP&A solution

Unit4 can provide you with a Cloud-based financial planning and analysis service that can automate your invoicing processes as well as much more. Unit4’s FP&A service can do the work of a whole accounting department, including invoicing but also much more, reducing labor costs and data consolidation times greatly.

With our Cloud-based approach, all the data you need is right at your fingertips and our data recall is fast. This efficiency allows Unit4 to help with many other financial operations, such as planning and analysis of existing data.

Unit4 also has the reach to integrate the data from multiple departments, providing analysis and projections that take everything into account. Budgets can be updated in real-time while both standard and ad hoc reporting allow CFOs to make informed decisions and reduce risk even as their responsibilities expand with company growth.

The return on investment is high with Unit4’s fit-for-purpose service which can be molded to the unique shape of your operations, rather than conceding efficiency to outdated systems. No matter how much your business grows, Unit4 can help scale and adapt your financial operations with ease.

Talk to sales today to learn how Unit4 can help automate your invoicing processes and unlock financial efficiency for your business.

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