7 Great Tips for Better Invoicing for Start-ups

Invoicing is among the most important aspects of operating a small business.  However, it can be such a big hassle at times- particularly if you are a start up company and new to the process.

So what is the best way to avoid having to spend so much time on the minor details of generating and sending out invoices and needing to chase late payees down, so that you have more time to focus on the important aspects of your business?

Looking Professional – Stay Consistent With Your Brand

Whenever you are generating invoices, it is very important to ensure that they look as sharp as possible.  If you send a customer something that has an amateurish and cheap appearance, they might not feel so inclined to pay you as fast as if they receive a more professional-looking bill.

Make sure that your invoices have your logo on it and also ensure that the amount you are owed is clearly spelled out.  Your brand should be reflected in the wording and colours of the document.  For example, if you happen to be a copywriter and using plain English is something you take great pride in, don’t add a lot of legalese to your invoice.  Save that for your terms and conditions, or have a good lawyer translate the legal terms into plain English.

Keep Things Legal

You want to ensure that your invoice is correct and in compliance with VAT requirements and with company law rules as well since it is a legal document.  If your business is a limited company or LLP, your business’s registered number and address should appear on the invoice.  It should also show any directors or members as well.  Fortunately, if you are using an online accounting system, it will all be done automatically for you.

Consider The Numbers

According to HMRC rules invoices are required to have “unique sequential reference numbers.”  However, the same sequence does not need to be used across your entire business.  For example, a different sequence can be used for every project or customer.

Select Your Pricing Structure

There isn’t anything illegal that prevents you from requesting a deposit from your customers, or for full payment upfront prior to you doing the work.  It confirms that your customer is committed to the project as well as being easier on your cash flow.  It also helps to spread financial risk between your customer and you.  If your customer isn’t required to pay until the work is complete, and then refuses to pay or disappears, you won’t have leverage any longer to stop the work- since it is done already.

If you are concerned that you may lose customers by asking for an upfront payment, then think about offering your customers a money-back guarantee if they aren’t satisfied with the service that you provide.

Make Sure Your Payment Terms Are Clear

Before doing any work, you should have informed your customer about what your payment terms are.  However, it still is important for this information to be included on your invoice.

If you have a 30-day payment period set and are expecting your invoice to be paid by the deadline, be sure this information is included on your document to make things as clear as possible to ensure that your client sees it.  Also, if you plan to make any late payment penalties or charges, be sure to make them as clear and prominent as you can directly on the invoice.  That way your client will have a reminder that the bill needs to be paid promptly.  Here are some good tips.

Follow Up On Invoices Right Away

Get into the habit of doing your bookkeeping at least once a week.  You should invoice at least that frequently.  Your invoices should ideally be sent out as soon as you have completed the work (unless your customer already paid you in advance).  That way, it will be one less thing that you need to worry about.  However, hopefully your customers will be pay you sooner than that.

Also make it as easy as you can for your customers to pay.  Include payment details, such as an online payment link or your bank account information, either on your covering email or on the invoice itself.  If you use a specific invoicing system for generating and sending out your invoice, check to see whether you can set automatic emails up to follow up on late payers.  That will help you save additional time.

Get A Technological Boost

Remember that it isn’t necessary for you do your invoicing from scratch on your own.  If you can possibly afford it, you should invest in specialist accounting or purchase management software to make this process much easier and convenient.

It can be especially useful if you will be send out invoices on a regular basis to the same client (for example, a monthly retainer fee) and would like to set up recurring invoices that are automatically sent.  Or if you want to include multiple expenses and would like to easily and quickly attach digital copies to your invoice of your expense receipts.  If you would like your client to pay faster, you might want to include a link to Stripe or PayPal, or some other online payment option so that they can pay you with one click of a button.

Be sure to do your homework first and check out all of the different options that are available to you to figure out which system will work the bet for your business’s requirements and you.  Over the long run, it can help to save you many hours of hassle and administrative work.

Invoicing is a crucial aspect of any business’s administration, since without invoices there isn’t a way for your customers to know how much to pay you, and if you don’t have money coming in, your business won’t be able to survive for very long!

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A Hangover Cure for Your January Finances

Christmas is a busy time for many small businesses. Paying wages early, an expensive Christmas party, and the increased chance of being paid late by your customers all mean you might find yourself in pain in the first few weeks of the New Year. And just as people make resolutions for themselves at the start of the year, many businesses get ready to hit the ground running in January. It’s not an ideal time, then, to be hit with a big tax bill. But this is exactly what happens to a huge number of businesses in the UK — whether it’s PAYE, VAT, or even corporation tax that’s due, a lot of different quarterly or annual bills can come up in January.

So what can business owners do to avoid a financial hangover caused by their January tax bill?

We’re not going to suggest raw eggs, hair of the dog, or a cold shower — but here’s a few ways you can shake it off and get your business’s New Year’s resolution back on track.

What are the implications if you don’t pay your tax bill?

It’s risky business to delay paying tax you owe. Last year, they ordered 3,000 businesses to shut down because of late tax bill payments. Of course, in some cases, businesses receive a slap on the wrist. This might tempt you to take your chances, but it’s really not worth the risk, and here’s why:

If HMRC take enforcement action because you haven’t paid your tax bill, it can cause your business serious problems. They might take you to court, pass your debt on to a debt-collection agency, or even close down your business. None of those options are good — and it doesn’t matter if you can’t or won’t pay.

So the best thing you can do is pay the bill as quickly as you can. If you don’t have enough working capital to do it, or paying the bill in full would leave you in a tight spot in terms of cashflow, short-term finance might be a good idea. If you’re really struggling, talk to HMRC!

Be honest with HMRC

It sounds obvious, but keeping the lines of communication open is really important in times like this. It’s no use running around trying to get the funds together to pay if HMRC don’t know — they could take enforcement action in the meantime. So make sure you’re honest and open with them, and they know that although you can’t pay now, you’re making plans to do so.

Bear in mind that if HMRC agree for you to delay payment or pay in installments, you’ll still have to pay interest and late fees. In other words, coming to an agreement with HMRC might save you from enforcement action, but will still leave you worse off than paying the bill in full before it’s due.

If you need any more convincing that it’s a bad idea to delay paying HMRC, bear in mind that many lenders will turn you down for finance if you have an outstanding tax bill, which limits your options even further. Overall, you need to be proactive and make a plan — with an overdue bill from HMRC, the absolute worst thing you can do is nothing.

What can you do about it?

If you don’t have the working capital to pay your tax bill outright, you might consider getting short-term finance to see you through the first few weeks of the New Year. At times like this, your accountant could prove very useful — talk to them to figure out an action plan, and see if there is any wiggle room on your balance sheet.

As we’ve seen, if at all possible the best thing you can do is pay the bill in full as soon as you can. If doing that leaves you without much working capital left over, think about what would happen in an emergency. And if there’s no way you can pay it, look at all your options — talk to HMRC, and think about approaching finance providers if you need to bridge the gap. Here are some of the options worth considering:

Overdraft alternatives

If you don’t need a huge amount to make up the difference, a cashflow facility similar to a bank overdraft makes sense. Lenders differ in exactly what they offer, but generally you’ll agree a maximum limit, borrow up to it whenever you need to, and only pay interest on what you use — useful for short-term hiccups like a big tax bill after Christmas!

Short term loans

Term loans aren’t as fashionable as peer-to-peer lending (or so-called ‘marketplace lending’) at the moment, but could be perfect for getting you through a few weeks or a few months of temporary difficulty. They’re suitable for a wide range of businesses, although you will need some kind of security or a robust trading history.

Invoice finance

If your firm trades on credit, January can be particularly bad for late-paid invoices from clients. With invoice finance you can get an advance of cash before your client has paid, so you don’t have to be left hanging. That means you can pay your bills on time, even if your customer isn’t doing the same!


Tax bills catch everyone by surprise — believe it or not, even accountancy firms can get a nasty surprise from HMRC in January. It’s always going to be hard to come up with a lump sum, particularly for the larger quarterly or bi-annual payments, so be prepared and have a plan. If it doesn’t work out perfectly, there’s a range of alternative finance that can help.

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Financing Failures: Why so Many Startups Can’t Survive

Have you ever dreamed of starting your own business? Every year thousands of people fulfill their dream of becoming an entrepreneur only to encounter unforeseen obstacles that cause their venture to fail. In fact, 90% of startups fail within their first year. Learn why it’s so hard to start and sustain a successful business and how you avoid some of the common pitfalls like financing failures.

Product or Service Isn’t Wanted

A survey conducted among failed startup founders said that the lack of market or need for their product, was the main reason for their failed business. Basically they didn’t have a product or service enough people wanted or need. Check for flaws in your demand with these areas.

  • Weak Value Proposition

A value proposition is a statement that says why people should buy your product. For example, people buy Aspirin because they know it will get rid of aches and pains. Your product needs to have a clear value proposition in order for people to know why they should buy your product.

  • Wrong Time

No matter how great your idea is, your business must be relevant to today’s consumers. If your business is ahead or behind the times, it’ll be very hard to gain traction. Are there already a thousand stores just like yours in the neighborhood? Get in at the right time and your business will take off.

Not Enough Money

Money management is critical for any business, but especially in a startup. The key to proper financial management is having the right equipment when you start. In order for your business to function, you need certain essential equipment. Do not decide to invest in the necessary items after you have open up shop. That’s like flying a plane that’s only 95% ready. You should also keep enough cash on hand for day-to-day operations. A business cannot be sustainable if you don’t have enough daily cash. If you know it will take off in time, a loan might be a good way to get on your feet. Talk to investors as well to see what options you might have for outside funding.

Not the Right People

In order to have a successful business, you need to build it with the right people. However, just because someone is skilled at their craft, does not mean they are great management partners. Business is a tough environment and your team needs to be composed of people with key skills, leadership ability, and similar vision. Find people who will work with you to achieve your vision. You should also be willing and able to compensate them. Even if you picked the best, they will easily fall away or desert you if they can’t see the rewards. Use a good system and a Pay Stub Calculator to make sure everyone is compensated accurately.

You team will need to generate good business ideas, test them, and thoroughly carry out your business strategies. If you have a great management team you will probably be able to avoid the other two causes of failed startups.

Plan Now

Before you decide to open your own business, create a well thought out business plan. As Benjamin Franklin said, “If you fail to plan, you plan to fail”. Study why businesses fail and plan how you can overcome these challenges. Once you have a solid plan, get what you need, and start your dream business!

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Reward to Retain: The Effects of Loyalty Schemes in the Insurance Industry

Three quarters of people would change insurers to a company offering the same product at the same price – as long as they gave them loyalty schemes too.

The figures were revealed in a major survey carried out by M&S for Business that looked into the way companies in the financial sector attract new customers – and keep them.

As well as surveying customers it spoke to insurance industry figures to try and discover what makes a successful acquisition and retention strategy.
While 95 per cent of respondents said price was one of the most important factors when deciding what policy to buy, only 55 per cent said price was the sole reason. It suggests that in such a competitive industry a loyalty or reward scheme to add value to a policy could improve chances of take-up.
Experts agreed and most insurers quizzed said they already ran some sort of reward scheme.

But the survey also revealed that almost half (45 per cent) of respondents did not know if their insurer offered a reward scheme or not.
It suggests that communicating the scheme on offer to customers is just as important as the scheme itself.

Increase Customer Acquisition

The report concludes: “Implementing a reward scheme for loyalty, referrals or signing up to an insurance policy is a great way to increase customer acquisition, retention and satisfaction. However, it is important that the offering is relevant to the individual and offered at the right time.

“Allowing customers to earn points and rewards makes them feel involved with your brand and gives them the feeling that your service is worth more than that of the competition. As with any relationship in life, the one between business and consumer needs to be nurtured and approached delicately.

“That is why research and planning are imperative to the success of a reward scheme. If you get it right, you can build relationships and create brand advocates who will stay with you for a lifetime.”

Encourage Customer Retention

Stuart Lawrence, Head of M&S for Business said: “We know that the insurance industry is one of the sectors where it can be most difficult to encourage customer retention. With insurance usually being an annual purchase and most people hunting for the best priced policies, it can be hard for an insurance company to offer a unique service.

“With this in mind, we have carried out some research to discover what qualifies as a successful customer acquisition and retention strategy within the industry and found that reward schemes are something that is seen as value for a customer.

“We feel that the results of this research are transferable to other sectors within the financial industry and provide an interesting insight into a customer’s perception.”

To look at the complete findings, visit M&S for Business’ website.

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5 Personal Finance Books to Add to Your Reading List

What have you been reading this summer? Every person reading this post likely has a different answer. Some prefer lightweight reads in the summer months such as young adult fiction or romance novels. Other prefers historical fiction, political satire, or biographies. Maybe sci-fi and fantasy are more your speed. Whatever you have been reading, hopefully you’ve enjoyed it.

Now, let’s talk about a few books you should be reading as your autumn closes out. When it comes to personal finance books, everybody could use a little bit more information, and a little more education. Whether the authors are giving advice on saving money, living on a budget, or investing, books on personal finance are great additions to anybody’s summer reading list.

This is why we have put together this list of 5 books on personal finance that you should read before the weather turns cold.

Women and Money – Suze Orman

Suze Orman has provided insightful financial advice to people for decades. She continues this pattern with “Women and Money”. Suze Orman recognizes that when it comes to money women need both education and empowerment. This book includes a 5 month program that helps women establish financial independence and personal freedom. Many books provide a lot of heady, high level information.

Ms. Orman takes a more practical and relatable approach providing women with specific steps that they can take towards improving their financial situations.

Why didn’t they Teach me this in School: 99 Personal Money Management Principles to Live – Cary Siegal

Cary Siegal wrote this book upon realizing that his children and their peers would graduate from high school and college without any formal, personal finance education. In spite of covering 99 principles, this book is quite easy to read and the lessons are conveniently parsed out.

This book targets young adults, but there is valuable advice here for any age group.

The Success Principles: How to get from where you are to where you want to be – Jack Canfield and Janet Switzer

Do you have plans and life goals that you have yet to achieve? Maybe you would like to start a business or go back to college. Whatever your plans are, it can be easy to feel stuck where you are, and getting to a place where you have achieved your goals can seem impossible.

This book is a goal-oriented book that gives financial advice that relates to conquering your next challenge. The authors include daily action steps, ways to increase your confidence levels, and practical advice on living in the modern age.

Rich Dad Poor Dad – Robert Kiyosaki

Rich Dad Poor Dad is a book about money lessons learned from two different men and the influence those lessons had on the author. The lessons he learned from the rich dad in the novel gave the author the opportunity to retire before the age of 50. In this book, he passes that knowledge on to others.

Many readers will be surprised to find that what they have been taught about money is completely off base.

Total Money Makeover – Dave Ramsey

Dave Ramsey is a well-known author, financial guru, and a nationally syndicated radio talk show host. Ramsey has a very easy to read writing style, and provides a lot of great practical advice to his readers.

The best endorsement of Ramsey’s is advice is simply the success that his readers and listeners have achieved by following his advice. Many are put off by Ramsey’s tendency to be extreme in his rhetoric, and that is a valid criticism. However, if that can be ignored in favor of focusing on just his financial advice, readers can learn a lot.

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Seven Ways to Save on Your New Business Building

Buying a new business building can be a costly and time consuming process. But there are a few proven ways to reduce both the short term and long term costs. Use these seven ways to save on your new business building and make sure you’re heading in the right direction financially.

Work with a Real Estate Professional
The building you purchase and the subsequent location will have lasting consequences for your business. Choose your building according to both your present and projected future needs. A real estate professional will have better access to a wider range of properties and will also advocate for your needs and dislikes. As a result, a real estate agent can be the negotiator you need, and use their professional skills to get you a better deal.

Choose Wisely
Your new business building will require the employment of many different contractors. While a finished building may only require a few touch up projects, be sure to carefully select your contractor. Avoid accepting the first bid, or rushing through the process. Thoroughly check references for contractors through asking their previous clients for reviews. Choosing the right contractor will be financially beneficial in the long run because you will most likely have need of their services in the future.

Project Management Software
Buying and fixing up a building for your business will be a long term project with many complex tasks. Using project management software will allow you to stay within the budget, while making sure deadlines are met. Project management allows you to stay focused while reaching your business goals. Use a good organizational or software system to keep track of bills, project progress, and future tasks.

Understand the Math
It is important to understand the financial costs of buying a business building. There are also real property costs, such as real estate taxes and settlement costs. Your constructing assets will be part of your cost basis, which may include labor, materials, contractor payments, and inspection fees. Be sure to work with a certified accountant to maximize your savings. Learn more about the financial costs of buying a building from the IRS.

Permits and Licensure
Consider establishing a limited liability company (LLC) as the owner of the building. This will provide legal protection through limiting your personal liability and protecting your personal assets from potential lawsuits. Buying a building through an LLC also guarantees privacy, as LCC records are not public property records. Finally, be sure to obtain the correct local, county, and state licenses and permits for your business and industry.

Save Energy
The good news is, there are plenty of ways to save energy through making adjustments to lighting, office equipment, and the HVAC system. For example, use compact fluorescent lamps (CFLs) and replace any incandescent ‘exit’ signs with LED ‘exit’ signs. Be sure to install motion sensitive lights in areas that are occasionally occupied, such as break areas or conference rooms. Purchase EPA approved, Energy Star equipment, and plug load controllers that can shut down inactive electronic equipment. Laptops use over 80 percent less energy than desk computers, and you can keep your HVAC system in top shape through regular, preventative maintenance.

Lawn Care
Using a professional landscaping service will save you time, which in turn will save you money. A BBB business reviewed lawn care service company will have commercial-grade equipment and tools which will save a lot of money in the long run, since lawn maintenance requires a variety of supplies and equipment, such as fertilizer, leaf blowers and lawn mowers. Landscapers will have the expertise and know how to properly care for plants and trees. And most services like Pro-Lawns aren’t just hired for the pleasant seasons, but also come in handy during winter for snow removal in St. Louis or wherever your business is located.

As a business getting into a new building, you can save a lot of money through using competent real estate agent and contracting professionals, utilizing project management software, understanding finances and licensure, and can cut costs through energy efficiency and by using a lawn care service. Use these tips to help you get started saving more on your next building.

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Guide to Buying a Small Business

Embarking on a small business venture takes courage, lots of energy, and a willingness to take risks. This guide to buying a small business, instead of starting a new business from scratch, will showcase several advantages that buying an established small business venture offers.

The current owner has already done the crucial, real-world testing, and established a cash flow track record, which proves the products or services have a market. Learning how to buy a small business is largely a matter of paying attention to due diligence, and evaluating three core concepts.

1. Cash Flow and Profit Margin

One of the most important questions to ask when buying a small business is what is its profit margin? Profit margins vary between industries, and you should do your homework on what is a competitive level to shoot for.

The income and cash flow statements should give you a window into what is working for the company, and if there are products or services that are dragging down the profits. What to look for when buying a small business is the breadth of the customer or client base. If losing one or two major customers would jeopardize the cash flow of the venture, you should develop a marketing plan that brings in new clients.

2. Human Resources

What to consider when buying a small business in terms of human resources are the following: employee morale, work ethic, and commitment to quality. Taking the time to talk with as many of the employees as possible is a great investment. You need to find out if they are committed to staying with the business, and if they have ideas on areas in which the business processes can be improved.

Just like a business that is too dependent on a few customers, the loss of key employees can also destroy the venture. You need to make sure the crucial employees are willing to stay, or train in their replacements.

3. Processes

There are processes the business uses for everything from marketing, customer service, manufacturing, inventory, billing, receivables, etc. By asking lots of questions on the current processes, you gain a clearer picture of the true health of the business. This post is a good guide to the legal processes which may be involved.

What is the cost to acquire a new customer, and how is it accomplished? Does the business rely on advertising, trade shows, or word of mouth, and is there a marketing plan to test new ways to generate more business? How much is an individual customer worth over time, and is there a system to sell them additional products or services?

How current is the business on paying its bills? And how efficient is it in collecting its receivables? The balance sheet may list receivables as assets, but the employees may know which ones really are unrecoverable.

How accurate does the business know the cost of goods sold? Many small businesses have very poor inventory control systems, and manufacturing often is delayed by parts shortages. Does the business check with several vendors to keep its costs down?

Is there space allocated to dead inventory? Just like bad receivables, some inventory listed as assets may well be worthless. Even worse, the dead inventory continues takes money to store, count, and manage.

If it is a manufacturing process, how current is the equipment? If a piece of equipment breaks, what is the repair or replacement cost? And what does the work flow look like. Many companies have just grown over time without any thought to work flow, and have ended up with an inefficient process.

What is the quality of the products and services the business produces? Do customers continue to buy from the business, and refer new customers to it? How good is the business at meeting its time commitments to customers? What is percentage of products that are defective, and returned?

Final Thoughts

After taking the time to investigate as many of the business processes and employees as you can, you will be in a position to evaluate the numbers. Is the business sustaining growth, or have revenues and profits margins dropped? What is the reason the business is now for sale?

Before you make an offer, you need to have a clear plan on the direction you want to take the company. Does it require more working capital, new equipment, new product development, expanded marketing efforts and better customer service?

By doing the appropriate due diligence, you can deduce the inherent risk of ownership, and the investigation process itself can uncover new ideas for your success!

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