Years ago I wrote a line in one of my notebooks that I still think is the best business advice I ever gave myself:
“What you do for a living is work. Paperwork (billing, invoicing, etc.) is how you GET your living.”
Most of us go into business because we’re good at something. For me it was computers. Nobody starts a company because they love writing invoices. So the paperwork gets pushed to the end of the day, then the end of the week, then “I’ll catch up on the weekend.” And that’s where small businesses quietly get into trouble.
The job isn’t done until it’s billed
You can do beautiful work, finish on time and have a happy customer, and still not get paid, because nobody sent the bill. Every day an invoice sits on your desk is a day you’re lending your money to someone else for free.
A few habits that made a real difference for us:
- Bill the same day the work is done, or as close as you can. The job is fresh in your mind and in theirs.
- Write it so it can’t be misunderstood. What you did, when, and what it costs. A vague invoice is an invoice that waits for questions.
- State your terms up front, before the work starts, not after. Customers rarely argue with terms they agreed to.
- Make it easy to pay. The fewer steps between “I got your bill” and “it’s paid,” the faster the money comes in.
- Set aside a regular time each week for the books. Put it in the calendar like a client appointment, because it is one: the client is you.
Big customers aren’t always fast payers
One thing that surprised me early on: “It seems very strange that services are required immediately but processing payment can take months.” Landing a big organization as a client feels like you’ve made it. Then you learn about their payment cycle. Some large customers pay on 30, 60 or even 90-day terms, and the work they needed “today” might not be paid for until next season.
That doesn’t make them bad customers. It means you need to know their payment terms before you start, and plan your cash flow around them. Can you afford to wait? If not, talk about it before the work begins, not after.
I learned that one the hard way. Waiting for money cost me a lot of money. While a big invoice sits unpaid, your own bills don’t wait: wages, suppliers, rent, the bank. You end up covering the gap out of your own pocket, or on credit that charges you interest while you wait to be paid for work you’ve already done.
Credit cards: the fee you used to have to swallow
The other thing that quietly ate into my income was credit card fees. Every time a customer paid by card, a few percent of that sale went to the card companies, and back in the day you weren’t allowed to pass that cost on. You just had to absorb it.
That’s changed. Since October 2022, businesses in most of Canada can add a surcharge for credit card payments. There are rules: it can’t be more than 2.4% or what the card actually costs you, whichever is less; it doesn’t apply to debit; you have to tell the card companies at least 30 days before you start; and you have to show it clearly to the customer before they pay and on the receipt. Quebec doesn’t allow surcharges at all. Check with your payment processor before you start, as the details can change.
In my experience, a lot of people will gladly pay that extra percent or two just for the convenience of using their card. If you’d rather not add a fee, at least build that cost into your prices. Either way, don’t let it come out of your pocket without you noticing.
Watch your own books, too
Paperwork isn’t only about getting paid. It’s also about not paying for things you shouldn’t. I once found I’d been charged every month for a second account with a supplier that I thought had been cancelled. Talk about the importance of yet one more reason to keep a close eye on your own books and ask questions.
Look over your statements every month. Small recurring charges add up, and nobody else is going to catch them for you.
It’s not the fun part. It’s the part that pays.
If the paperwork really isn’t your strength, that’s fine. Get help: a bookkeeper, good accounting software, or a family member who actually likes numbers. Just don’t let it slide. The work keeps your customers happy. The paperwork keeps your business alive.
— Gary Wheeler, Dok-Tor Harddrive Inc.