How Complicated Billing Affects Your Business
Complicated bills cause delays in your billing and possible penalties for non-payment, which all but exacerbate the situations customers find themselves in. But the business loses out as well as your delayed payments affect their present cash flow, impacting their ability to make their own purchases down-the-line.
It’s the task of the business to explain the billing situation clearly to the customer at contract signing. But one of the main pitfalls after this is simply not laying out the charges clearly on your invoices. Many traditional invoices simply lay out the charges like a receipt, indicating costs chronologically as they come. Yet this gets especially complicated on post-paid plans that charge the month in advance as customers will now be charged both the prorated fee and the coming month’s fee all in one bill.
With roughly 70% of small businesses experiencing delays in payment, it becomes that much more important to reduce the waiting game for your invoices to be paid by creating better and clearer bills for your customers.
3 Ways To Better Develop Your Billing
Group Costs Drivers and Provide a Summary View
One of the best ways to begin your journey in developing a better billing process is to group cost drivers based on specific services or products provided. This is a key way to ensure that customers understand what is driving certain costs and what is being added from other sources.
This is especially salient for companies that have multiple products that wish to utilize a “one bill” system. Ensure that all the costs for these individual products are categorized accordingly, and provide a quick summary view on the front of the invoice to better communicate how much is the final bill. This summary should be an easy-to-understand number that combines any outstanding balance into a digestible and manageable figure.
Deeper explanations for certain cost drivers should be included in the bulk of the bill to allow your customer to better understand what each cost center is. This means indicating what the service provided is clearly and including how this was calculated (this is especially important for prorated values, or values that are generated from services started in the middle of billing cycles).
This also helps you and your business address any concerns from customers regarding particular parts of the bill as you can better isolate where the confusion might be stemming from in an organized layout.
Highlighting Regular vs One-Time Payments
As part of your effort to streamline your business’s billing system, it will be beneficial to highlight and indicate those cost centers that occur on a regular cycle versus those that were generated as one-time payments.
It can be helpful to illustrate to the customer what they are expected to pay based on the period of billing they had agreed on. For example, a telecom company would do well to indicate the amount to be billed per month for their customers, while also indicating the additional costs generated from any per-use item such as long-distance calls and data overage charges. This gives the customer better clarity and foresight on what to expect on the next bill as well as an understanding of what caused a particular bill to be different from the rest.
This also allows you to better indicate additional services that might be beneficial for your customer, potentially increasing business with them by utilizing comparative costs between their current bill and the proposed add-ons.
Utilizing Formatting Techniques
In indicating all these differences between numbers, one simple design technique you can utilize for your bills is the power of layout in terms of font choice and colors. This is especially useful for digital bills (or “e-bills”) that have the capabilities for linked content that takes the reader to more information online if they need it.
Whether you utilize paper bills or have made the transition to digital, one thing you can do to make it easier for your customer is to embolden the key figures they should be looking at. Highlight critical numbers that have an effect on their total bill, while also providing key information wherever possible to explain new charges they might not be aware of.
If you’re looking to learn more about how invoicing can further improve your customer’s experience with your company, give us a call at (905) 525-7364 or submit a short contact form regarding your inquiry and we will get back to you as soon as we can.