Invotrak: The Online Invoicing Blog

This Sunday from 1-3pm EST we’ll be performing some regularly scheduled maintenance and there may be some brief interruptions in service.  Should the site be unavailable, you’ll see our regular maintenance page and will be unable to access your account until service is restored.

We’re making some scheduled upgrades to some of the servers powering Invotrak, which is necessary to maintain performance as the site continues to grow.  We’ll keep it as quick as possible.

Be sure to let us know if you have any questions, and thanks for using Invotrak!

If you’re running a small business, invoicing is probably one of the last things you have time for.  There are so many responsibilities that go along with running a business that it’s easy to put off billing and invoicing tasks.  This might work for a short time, but you can find yourself in trouble when you need to do accounting, file taxes, or look for overdue payments.

Here are five tips for preventing billing from getting out of control:

1. Don’t let overdue invoices get away from you! The primary goal of a business is to make money, right?  Yet since many invoices don’t become due for 30 days, 45 days, or even more, it’s easy to forget about an invoice that you wrote weeks ago, and miss out on money that’s owed to you.  Make sure to set aside a list of all outstanding payments.  Don’t forget to remind customers and clients when they owe you money.  You don’t have to wait until they become overdue, either.  Sending a friendly reminder shortly before payment is expected can help avoid conflict and awkward situations.
2. Keep a record of every invoice you receive or send. This might be electronic (which means scanning in paper invoices), or on paper (which means printing electronic invoices).  The important part is that you have a single place to go to find an invoice from last week, last month, or last year.
3. Make sure every invoice and payment has a date associated with it! There’s nothing worse than starting to prepare your taxes only to discover that you don’t know which payments apply to the current tax year.
4. Make invoicing part of your routine. If you dedicate the same time every week (or month) for managing invoices, it becomes harder to forget or put off.  A common time for this is Friday afternoons, as it makes it easier to review the past week’s work.
5. Be consistent. This applies to everything from invoice templates to payment terms.  It might require a bit of extra work beforehand, but it’ll save you time in the long run.  Whether you create invoices in Word, PDF, online or on paper, create a basic theme that you can reuse every time.  If you’re able to simply fill out the line items and press send, it makes life much easier.  If possible, keep the same payment terms (e.g. Net 30) for every invoice you send as well.

As more accounting becomes electronic, it makes sense for many people to move to an online invoicing solution.  Being a small business ourselves, when we created Invotrak we made sure to keep small business users like ourselves in mind.  That means each of the above tasks needed to be fast and simple.

The idea is to make billing take up as little of your time as possible, so you can get back to the real work: building your business!

As a freelancer, you face many situations that employees don’t have to worry about. One of the biggest challenges is planning a regular paycheck. This challenge can be a cause of stress for many freelancers, as well as a fear that holds many others from pursuing life as a freelancer.

But it’s not all bad!  You can calculate what kind of an income you’ll need to make in order to make ends meet.  Doing this exercise before you take the plunge will help you gauge the kind of risk you make be getting yourself in to.

There is a solution to this problem, and it can be implemented into your business right away. You simply need to plan ahead. First of all, decide what amount you need to earn each week to make ends meet.

Read the rest of this entry »

One of the most frustrating things in any freelancer’s career is dealing with the inevitable late payments from clients who just can’t seem to pay their bills on time.  Is it intentional, or simple forgetfulness?  Most importantly, what can you do to make sure your clients cough up the dough when they’re supposed to?

As freelancers ourselves, we’ve often had to deal with the very same issue.  Through our work with our online invoicing app Invotrak we’ve found five simple strategies that statistically seem to work.

Invoice Amounts

First, we took a look at the correlation between the time it took to pay an invoice and the amount due.  Is it possible that invoices for larger amounts regularly took longer to be paid?  Intuitively, it seems so, and the data backs it up:

Our research shows that, on average, invoices for smaller amounts (less than $500), tended to be paid within about 33 days.  As the invoice amount went up, however, so did the time it took to receive payment.  The lesson here is to invoice early, and invoice often.

Terms

Every invoice you issue has a due date attached to it.  One seemingly obvious fact: invoices are more likely to be paid on time when their terms are longer.  But there’s more to it than that.  For instance, take a look at the following graph:

If you’re insistent on shorter payment times, you’re in for a world of disappointment in the 14-day and shorter time periods.  Our research has shown that over 75% of invoices issued with a 10-day payment window become overdue.  Invoices with a term of 45 days are far more likely to be paid on time then invoices with 30-day due dates.

There’s a number of possible reasons for this.  For instance, clients may be accustomed to getting 30-day terms and know they can often push these terms by a few days (and encountering 45-days throws them off).  Or, perhaps clients pay all their bills in batches, regardless of when the invoice is due.

Whatever the reason, if you’re interested in getting paid on time and avoiding friction with your clients, go with the 45-day term instead of the typical 30.

Invoice Reminders

Another strategy to getting paid on time is to send out reminder notices to clients about upcoming invoices.  These reminders, often automated and sent several days before the invoice is due, are usually encouraged by experts.  Do they actually work though?  Let’s take a look at the average days to pay an invoice for each of four popular invoice terms:

According to our research, not really.  For instance, overdue invoices issued with 30-day payment terms averaged payment 6 days late.  Invoices with automated reminders sent out did … almost identically.

This lends itself to the conclusion that clients aren’t typically forgetful of invoices and need reminding; instead, they are planning to pay the invoice on their own schedule.

Of course, you need to judge for yourself.  If you have a client that seems to be forgetful of invoices, (or needs a subtle reminder that you’re serious about due dates) you should send those reminders.  Simple, automated reminders can be a great way to nudge clients without introducing friction.

Secrets to Getting Paid On Time

So what’s the secret to ensuring you get paid on time?  Here are the key lessons:

1. The norm for most invoices is 30 days.  Clients tend to expect these terms and are likely to structure their own finances around it.  It’s not unlikely for clients to send out payments for many vendors at the same time.
2. If you’re worried about tension in the relationship, consider using 45-day terms instead of 30.  It’s more likely clients will pay within those 45 days, creating less cause for arguments or awkward notices.
3. Invoices for smaller amounts were more likely to be paid faster than invoices for larger amounts.
4. Invoice terms of less than 14 days are routinely late.
5. Sending out reminders several days before an invoice is due can be helpful in some situations but didn’t have a noticeable impact in our research.

Ultimately, you’re the judge of your own situation.  You know your clients, their habits, and how likely they are to accept certain terms.  If you have the flexibility, try to invoice for smaller amounts on a regular basis.  What strategies have you used to get paid on time?

We’ve all seen it.  We’re looking up an organization’s website to get some info only to see a horrible-looking design: blinking text, nauseating background images, and a color palette from hell.  Intuitively we know this hurts and organization, but by how much?  As it turns out, quite a bit.

Every business that has any interaction with customers on the web (in other words, if anyone is going to your business’ site) needs to pay attention to several factors that affect credibility.

Stanford University produced a report called “Stanford Guidelines for Web Credibility” which, among others, made the following suggestions:

• Establish the business’ legitimacy
• Look professional
• Use restraint in promotional content (ads, etc)
• Update content regularly
• Avoid errors of all kinds (no matter how small) and make it easy to verify accuracy of information

Establishing Legitimacy
One of the keys to establishing credibility is to first prove legitimacy.  In other words, is the business’ physical address posted?  Are there photos of team members?  Is there an easy way to contact the business?  Indicators like this prove that there is actually someone behind the site.  The human element is critical to establishing legitimacy.

In addition, the study suggests that content on the site be tailored to promote the organization’s expertise in the products and services it provides.  Showing off the credentials of experts in the organization can help establish legitimacy and trustworthiness.

Look Professional
Part of the “look professional” suggestion is further evidenced by a post from Kent Shaffer, who says “60% of the decision to buy a product is based on color.”  He cites a Nature.com article (which is behind a register wall) with the following key takeaways:

• If you can snare people with an attractive design, they are more likely to overlook other minor faults with the site, and may actually rate its actual content more favorably.
• Potential readers can make snap decisions in just 50 milliseconds.

The only way a potential customer to a business’ website is able to make a snap decision is based on presentation: if the design of the site looks professional, is easy to read and attractive to look at, that snap decision is far more likely to be in favor of sticking with the business’ message than navigating away.

Avoid Errors
Another key finding in the Stanford study is the avoidance of errors.  It’s my contention that users are always looking for a reason to distrust a site, and it’s very easy to find one on sites with broken links, bad grammar or spelling mistakes, or (especially) factual errors.  Even trivial mistakes can hurt credibility.

Taking it further, however, is to build credibility by citing sources.  From the study: “You can build web site credibility by providing third-party support (citations, references, source material) for information you present, especially if you link to this evidence. Even if people don’t follow these links, you’ve shown confidence in your material.”

Keeping content updated and properly citing sources can be a key way to establish credibility among potential customers.

Conversions through Credibility
It seems the keys to building credibility for a business is to have an appealing design, quality (and regularly updated) content that is free from errors, and employing simple methods to establish legitimacy.

As Shaffer said, “Users who trust your site are far more likely to become customers.”  Create a credible site to bring in customers without turning them away.

Other Resources

• Problogger: Blog Credibility and Blog Design
• Michael Reynolds: How design affects credibility on the web

What tips do you have to create credibility on the web?

Now that Invotrak 2.0 for the iPhone and iPod Touch is available on the App Store, I thought I’d take a few minutes to put together an in-depth slideshow to properly show off just how cool this app really is:

Using Invotrak you can very quickly create and track invoices and timesheets.  But one of my favorite features is the new system for creating PDF copies of invoices, right on the iPhone!  There are five built-in professional-looking templates that can be used.  And, if you have a company logo, you can even include it!

The app also allows you to manage line items much more effectively than the previous version.  Take timesheet entries you’ve entered and add them to an invoice as billable hours, or add individual line items one-by-one.

The app even includes a number of handy refinements, such as a timer to more accurately track time spent on a project, and client contact information, so (with one tap) you can call or email your client right from the app.

Hope you’re as excited about this new version of Invotrak as we all are!  It took a lot of time and effort to put it together, and we’d love to hear your thoughts.  If you haven’t yet, be sure to check out Invotrak in the App Store.

Great news: the new version of Invotrak for the iPhone, version 2.0, is now available in the App Store!  As mentioned earlier, this new version has quite a few exciting new improvements.  Check out the quick 1-minute overview video for the rundown:

This screencast shows off the cool new features of Invotrak 2.0 for the iPhone! See how to create invoices, use templates, create and send PDF versions of your invoices, track timesheets, and more. Check out how to use it, then get Invotrak for free in the App Store.

Essentially, the application is a completely new version of Invotrak on the iPhone, including nearly all the same functionality of the application on the web into one easy-to-use iPhone app.  You can create and edit invoices, create and email PDF copies to your clients, track timesheets, and manage client information.

If you have an iPhone or iPod Touch, check out the FREE Invotrak app.

Today a new update just went out on Invotrak.com to improve the user interface a bit.  Here’s a couple of highlights:

• The invoices page now has a “Record an Invoice” button in the top-right
• On the invoice page, you’ll notice that there is now an “Add a Line Item” link below the Line Items table (rather than having the form on the right of the page)
• There is also an “Add a Payment” link on the invoice page which pops up a small dialog, with an improved form for adding individual payments
• Finally, on the timesheets page, we switched the “Form Entry” and “Punch” tabs, based on user feedback (more people seemed to use the Form Entry version rather than Punch).

Hopefully you find the improvements helpful.  We’re constantly trying to refine the application, and we’re always looking for your feedback to help us make Invotrak even better.

Great news: Invotrak 2.0 for the iPhone has just been submitted to Apple for review!  Here’s a copy of the release notes:

Invotrak 2.0 is a major update allowing you to manage your invoices, timesheets and clients better than ever:

• Revamped user interface
• Improved support for line items in invoices
• Generate PDF invoices and view them in Invotrak
• Email invoices to clients
• Call or email your clients from Invotrak
• Invoices can be created using your timesheet entries
• Numerous stability improvements

Using Invotrak, you can easily create, view, send, and manage your invoices while on your iPhone.  It also features powerful timesheet tracking tools to record and invoice for your billable time.

We’ll have more updates about this major enhancement to the mobile version of Invotrak available in the near future, and we’ll let you know when the new version is ready for download.

Are you using (or considering expanding) your social media presence to find customers?  There’s a lot of promise in things like Twitter, but making it work for your business requires a certain finesse and creativity that may require some thinking.

Invotrak could benefit from better social media exposure.  Of course, we’d rather spend our time building a better product than promoting it on Twitter (or regularly updating this blog!), but we recognize the need for a presence.  You may be in the same boat as us.

First, some words of advice.  If you’re considering outsourcing your social media efforts to an expert, beware of the pitfalls.  BusinessWeek’s article Beware Social Media Snake Oil has some great advice:

The problem, according to a growing chorus of critics, is that many would-be guides are leading clients astray. Consultants often use buzz as their dominant currency, and success is defined more often by numbers of Twitter followers, blog mentions, or YouTube (GOOG) hits than by traditional measures, such as return on investment. This approach could sour companies on social media and the rich opportunities it represents. “It’s a bit of a Wild West scenario,” blogs David Armano, a consultant with the Dachis Group of Austin, Tex. Without naming names, he compares some consultants to “snake oil salesmen.”

Next, now that you’re properly armed, start your own creative process.  Smart companies have found ways to engage customers using Twitter, and Inc Magazine profiles several of them:

Most business that use Twitter think of it mostly as a promotional tool, a way to announce new products, perhaps gain readers for a blog. But some smarter companies are actually using Twitter to sell products, such as Dell Corp., which recently acknowledged that it had made $3 million in sales in two years over Twitter, primarily by posting coupon numbers for discounts of 10 percent or more on Dell Outlet items.

One of the main goals I’ve been putting off is to make better use of our own Twitter stream.  Typically, we post short updates (like when we launch a new feature), but I’d love to have more useful general information as well.

Are you using social media for your business?  What novel, creative things have you tried?  Did something you try not work out as you expected?  Be sure to also let us know what you think we could do with the Invotrak Twitter account.