There are three main ways to send an invoice: (1) By snail mail, (2) as an email attachment, and (3) through an invoicing or accounting solution. In this article, we’ll go through each method and the pros and cons of each.
So, you’ve created an invoice. It’s a thing of beauty. Now what? Your invoice doesn’t mean much until you send it to your client. Maybe you’re wondering how you should send an invoice. There are a few options. Read on!
(1) How to Send an Invoice? Through Snail Mail
It’s hard to believe now, but there was a time when the majority of invoicing was down on paper, with invoicing and payments travelling back and forth through the mail system.
This may seem quaint but some businesses still operate this way. And you could choose to send your invoices off this way too.
But generally we don’t advise using snail mail. That’s because there are a few obvious downsides to this approach:
Disadvantages of Sending Invoices Through Snail Mail
(a) Time
You may think it’s an exaggeration, but it’s a timesuck to print invoices out, put them in envelopes and take them to the post office. Back in the day, there used to be office temps dedicated to this mind-numbing task. It’s just not worth the time and effort it takes.
(b) Possibility of Lost Docs
Mail can be notoriously unreliable. It’s not just the system that can fail you. One mistake on an address and your invoice can get lost in the ether. Plus, it can take you a long time to realize this has happened.
(c) Further Delays if You Make Mistakes
Imagine the scenario: Your invoice makes it through the vagaries of the mailing system and lands at your client’s desk. But they immediately spot an error. Maybe you forgot to update the invoice number. Or your invoice amount is totalled incorrectly. They call you up to ask for a correction. But now you’re right back to the very beginning…
(d) Delayed Payments
If you mail an invoice, odds are you’re collecting payment in the form of a mailed check. This means you’re caught up in the waiting game both ways; waiting for the client to receive the invoice, waiting for the cheque to come. Then you have to deposit it, wait for it to clear and more. It all adds up. Especially if you’re running a small business and cash flow is a real concern.
(e) Lack of Responsibility
The postal system gives your client an easy excuse for why payment has not been made. They can easily stall on payment, saying “the check is in the mail”. Most business owners want money in their pockets faster so they can pay their own bills or invest in their business.
(f) Messy Paperwork and Reconciliation
All this printing and physical paper means a lot of “paperwork.” When invoices are sent, you must file a duplicate copy for your own records. When checks arrive in the mail you must manually reconcile the payment to the invoice (making sure the amount is correct)
For all these reasons, fewer and fewer businesses are sending their invoices through the mail. Instead, they follow one of the other two approaches:
(2) How to Send an Invoice? By Email
It’s much more common these days to email your invoices to clients.
Many small business owners and freelancers create invoices online using free templates built for Word and Excel. They then save the file as a PDF. This ensures it cannot be edited on the recipients end.
After that, it’s simply a matter of sending the email to the client, with the PDF attached.
Advantages of Sending an Invoice as an Email Attachment
(a) Ease
We all email people daily. It’s a fast, convenient, and reliable way to communicate with your clients. Once you have a decent template, it’s relatively easy to whip up an invoice, save it as a PDF and send it away.
(b) Speed
With traditional snail mail, most invoicing was saved as a big “job” until month end. With email, you can send off an invoice as soon as the work is complete, which hopefully means you’ll get paid faster.
(c) Looks More Professional
Online templates are convenient and help you look professional for your clients. Many small business owners want to be taken more seriously, especially if they’re working for “big” clients, so having paperwork that creates a good impression is key
However, despite all these advantages, there are still some downsides to sending PDF invoices by email:
Disadvantages of Sending an Invoice as an Email Attachment
(a) Can Still Be Clunky to Use
Yes, those templates can offer ease and speed compared to snail mail. But they can also be clunky to use. They don’t allow for automation and are still prone to simple errors that take time to correct.
(b) Payment Still Needs to be Resolved
Sending an invoice by email is easy, but it doesn’t necessarily take care of how you receive payment. You might still have to wait for a cheque to arrive in the mail.
Better invoice templates enable you to get paid online (by credit card or ACH). Since the whole point of an invoice is to get paid fast, this is a major factor to consider.
(c) You Must File / Store Invoices on Your Computer / Drive
All those Word docs and PDFs still need to be stored somewhere. Whether you use your hard drive, Google Drive or Dropbox, it’s key you stay organized. This sounds straightforward, but over time these filing systems can be a challenge to maintain.
If you save over invoices regularly, one simple mistake will mean you lose the original document and have to rifle through email threads to find your documents. This usually happens during tax prep, which is already stressful enough!
(d) Manual Reconciliation is Still Required
In order to know which invoices have been sent and paid at any given time, you’ll probably need a separate spreadsheet to track your invoicing history. Again this is another manual process, which can be clunky and prone to errors.
(e) Tracking Your Financials / Getting a “Big Picture” View of Your Business
It can be hard to know if your business is profitable when all your financial documents are buried in folders.
This means you’ll also need to track your expenses and invoice payments in another spreadsheet to understand if you’re really profitable, whether you have money to invest in your business etc.
As you can see, sending and invoice by email is a step in the right direction. But it still has some disadvantages. Better invoicing solutions allow you all the convenience of email but also help you with some of the other challenges touched on above.
Read on to learn more!
(3) How to Send an Invoice? Through An Invoicing Solution
Professional invoicing solutions, like FreshBooks (see our other top picks here) give you all the benefits of professional-looking templates, with a variety of customizable options that you can update with your logo and brand colours.
But more than that, they have other key advantages, including:
Advantages of Sending Invoices with an Invoicing Solution
(a) Automatic Updates and Calculations
Professional invoice solutions automate many of the invoice fields (like invoice number and invoice date) and calculations.
This means you’ll make fewer mistakes when preparing your invoices and will be able to complete the task even faster and with more confidence.
(b) Automated Follow-Ups & Optional Late Fees
Invoicing solutions have many more bells and whistles. These can include automated follow-ups on unpaid invoices, with options to add late fees to your invoice terms.
These conversations are often dreaded by business owners so it’s nice knowing you can put the entire process on auto-pilot with the right solution.
(c) Get Paid Faster with Online Payments
One of the crucial downsides of both snail mail and emailing was that it still left payment up in the air. With professional invoicing templates, you’ll usually have the option of adding a payment method.
This means that your customer / client can pay you right away from the invoice, with credit card or ACH.
This is not only hugely convenient for your client, but it gets the money in your pocket much sooner. Many small business owners find that the transaction fees are well worth the cost of collecting payments online. Say goodbye to waiting for checks in the mal!
(d) Invoice Tracking & Security
With all your invoices sent and paid in the same place, you’ll be much better at knowing where your invoice stand:
- What’s been sent
- What’s outstanding
- What’s been paid
- That the amount paid matches the invoice total
These are things you’d have to track manually otherwise. But with professional invoicing solutions you can log in and see immediately where your invoices stand.
(e) Invoice & Financial Reporting
With all your invoices stored in one place, you’ll also be able to generate a variety of reports to analyze the health of your business.
Want to understand who your most lucrative clients are? What services are most demanded in your business? How many invoices are outstanding? You’ll be able to automatically generate a wide variety of reports.
These insights will help you manage your business better today, and grow your business over time.
(f) Additional Features, Like Expense Tracking
You’ll find the more robust invoicing solutions offer other complementary features. One example is expense tracking.
Expense tracking is the other important element to understanding where your business stands. After all, invoice tracking tells you what money is coming in, but not what’s going out.
(g) You’re Better Prepared for Tax Time
With professional invoicing solutions, your invoices and financial records are securely stored in one location.
This means you’re better prepared for tax time. You have easy access to all your information and can download reports in a format that makes it easy to complete your tax return
Invoicing Solutions: Worth the Investment
As your small business scales, investing in a solution that makes invoicing easy is important. But even more important is understanding your financials and knowing where your business stands at all times.
Invoicing solutions like this can cost as little as $15 / month and help you set yourself up for long term success. You’ll save time right away on annoying administration. You’ll save money because you’ll get paid faster and will better manage your financials.
In Conclusion: How You Send Invoices Impacts Your Business Success
In the end, most business owners realize that investing in the right solution to help them send invoice, get paid and track their financials was a wise investment.
If you want to put your best foot forward, consider investing in a tool that allows you to send invoices with ease.