This is something every young entrepreneur should know.
The entrepreneurial spirit may be alive and well with so-called GenZ’ers – those born between 1997 and 2012 – but one thing they lack for the most part is skill in one aspect of running a business that is simply both unavoidable and critical.
According to data from Pew Research, budding young entrepreneurs who belong to GenZ have trouble with the issue of invoicing. Billing of customers and clients is an inescapable and highly important part of business that, according to the Pew study, around 93% of GenZ’ers need help from their parents to resolve, while 53% were at a loss with regards to what specific information to include in an invoice.
This lack of understanding regarding invoicing can be explained in large part due to their lack of experience – with a whopping 95% considering themselves new to the practice of invoicing – however, even more experienced workers have trouble with it too. A recent Skynova report surveyed 1003 employees and found over half expressing doubts as to the full information needed to be included on an invoice.
This is actually a highly consequential issue, and why most companies have dedicated finance departments. Proper invoicing doesn’t just deal with billing clients and customers, it actually reflects significantly on the company itself. If customers and clients see that a business has sloppy invoice practices, with bills arriving late or even not at all, then confidence in that business as a trustworthy and viable enterprise will be greatly shaken, with that company’s reputation and, ultimately, it’s commercial performance sure to take a beating as a result.
Most people starting a business will tell you that invoicing is literally the last thing on their minds when establishing a startup… but somewhat ironically, it should be one of the very first things a new business owner needs to grasp.
In the previously mentioned Skynova report, 92% of professionals in the finance department field said they would be considerably less likely to work for a company that continually erred when it came to invoicing, with 60% branding such behavior as “unprofessional” and 59% calling it “incompetent”.
The art of invoicing can be daunting to some young people, and it’s this doubt that can lead to them procrastinating on the matter. But with today’s technology, it’s never been easier to learn, whether that be from software packages, online tutorials, or even Youtube videos, the knowledge is there to be learned with just the click of a mouse.
The best way to ensure a proper invoice is prepared is, firstly, to establish with the client the exact amount to be charged for the product and/or service. Once that is settled, and the work is done, the business needs to ensure that the invoice accurately reflects this agreed amount and also that the invoice due date matches the payment terms. Of the latter, it’s advisable that you offer the client more than one option on payment, as this will give that client maximum flexibility in remunerating your company, if there’s any confusion about how to pay you, then you won’t get paid, it’s as simple as that.
Like everything else in life, practice makes perfect, and invoicing professionals strongly recommend that new business owners learn how to invoice, even if they have a finance department in their company. Learning and becoming adept at invoicing gives you valuable experience to work from should there ever be any problems with your company’s client billing.
Simply relying on other people or specialist software to do the heavy lifting for you means not only is there a gap in your knowledge regarding your business that could have negative consequences down the line but also it doesn’t make for a very good business plan either.
