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Many SMEs face challenges when it comes to creating an invoice. This can be due to many different reasons such as lack of manpower, lack of IT savviness, or not knowing the best practices when creating an invoice. Let us have a look at what challenges they face in their invoicing process and how to solve them:
1. Limited Terms and Conditions in an Invoice
With the lack of system and standardisation that SMEs has for invoices, they may miss out on some important details. Many business owners overlooked on areas like the payment information and penalties for cancellation or late payments. By having the right terms and conditions, businesses can save time and effort in explaining to the customers.
2. Sending Invoices through various Channels
Some SMEs we talked to send their invoices through Email, messaging platforms like Whatsapp, also physically. This causes many invoices to get lost in the process. For example, one salesperson sends invoices using email, and another sends invoice using Whatsapp. It makes it difficult for the accountant to track. The most frequent scenario is when drivers misplace the physical invoice. In some cases, the paper is stacked up with other papers and makes it difficult to find. This issue can be simplified with a cloud accounting system, where your invoices can be sent through one channel.
3. Tracking the Status of an Invoice
Without a proper system, SMEs faces administrative issues like repeating invoice number and missing invoice number. This complicates the work of the accountant, especially when need to work on closing when it is near the end of the financial year. This means more overtime work for them during this period, checking through the invoices all in one shot, tallying all the accounts. A unified accounting system solves this problem. Businesses can keep invoices in ONE place, securely.
4. Chasing and Recording Payments
One of the biggest invoicing challenges is to get paid. Many customers do not pay invoices immediately, as different invoices have different payment terms. Moreover, once an invoice is paid, this needs to be recorded as well. This is a tedious process if not done using technology. Traditionally, business owners will keep a record in a book, or in excel- where information is not as easily accessible and searchable. That is why the Singapore government is encouraging SMEs to Go Digital! This effort is to help SMEs get paid faster, save time and spend time on the important tasks of the business. On top of that, initiatives like PayNow and InvoiceNow is also part of the effort to help SMEs get paid faster.
5. Report on Overdue Invoices
With many SMEs not using accounting software, businesses are unable to get a complete Accounts Receivable Report. This is an important report that summarises all the invoices that are due and for how long. Without an up-to-date report, businesses are not able to collect payments on time. And as time drags on, it results in more time and effort to get the payment in. In addition, business wastes valuable time when they research and look for u unpaid invoices.
Most of the invoicing challenges that SMEs are facing are due to the fact that there is no system or software helping them to manage. These are some of the issues we have helped SMEs solve. If you are also facing these issues above, try Enterpryze or contact us for a demo!