Invoicing Best Practices For Consultants and Contractors

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Invoicing Best Practices For Consultants and
Contractors
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Contents

1. Introduction
2. Ask For Advance Payments
3. Keep The Billing Cycles Shorter
4. Sending Invoices On Time
5. Early Payment Discounts
6. Go Paperless
7. Use an Integrated Time Tracking and Billing
   Solution

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Introduction

• Billing and payments for consultants and
  contractors is purely dependent on the nature of
  the contract that one has with the client. The
  contract agreement can be milestone based or
  periodical. One has to send out invoices on the
  basis of the details mentioned in the contract.
• Additional expenses are either included in the
  pricing of the service provided or as an
  additional charge as per actual. This too, is
  dependent on the kind of agreement one has
  signed. Here are some tips and best practices for
  billing for consultants and independent
  contractors.

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Ask For Advance Payments

• As a consultant you always want to get timely
  payments for the services delivered. Besides
  that, chasing for payments after the services
  have been delivered, can be very painful.
• Having a policy of advance payments is useful and
  one feels financially more secure and are able to
  deliver better services in such a scenario.

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Keep The Billing Cycles Shorter

• It is important to keep the billing cycles
  shorter for receiving payments on-time. For
  example, weekly or monthly billing cycles, should
  be preferred over quarterly ones.
• This helps in faster completion of payment cycles
  and keeps the payments flowing. Similarly, even
  while billing for milestones, one has to insist
  on shorter milestones, to get faster payments for
  the services delivered.

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Sending Invoices On Time

• Whether you are billing for milestones or
  monthly, you must ensure that the invoice is sent
  on the very date, that it is supposed to be sent.
  
• This ensures that the client does not pay up
  late, while giving an excuse, that the invoice
  was not sent on time. Using an online invoicing
  solution helps in sending invoices quickly and
  cost effectively. This also helps you focus more
  on your consulting business.

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Early Payment Discounts

• Many consultants and independent contractors,,
  provide early payment discounts for getting paid
  quicker. This helps in incentivizing the clients
  for faster payments. Some consultants also
  penalize clients for paying late.
• Online invoicing solutions provide features like
  late fee and interest payments for getting
  clients to pay extra for paying late.

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Go Paperless

• Sending invoices online, is the norm for
  consultants and independent contractors in
  todays time. Online invoicing helps in sending
  out timely invoices in a cost effective manner.
• An appropriate solution helps in easily managing
  and tracking a large number of invoices. Sending
  out professional invoices is easier while
  creating and sending them online. The process is
  far more efficient and reduces invoicing errors,
  many times over.

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Use an Integrated Time Tracking and Billing
Solution

• Sending invoices online, is the norm for
  consultants and independent contractors in
  todays time. Online invoicing helps in sending
  out timely invoices in a cost effective manner.
• An appropriate solution helps in easily managing
  and tracking a large number of invoices. Sending
  out professional invoices is easier while
  creating and sending them online. The process is
  far more efficient and reduces invoicing errors,
  many times over.

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Choose The Right Tool
As a consultant or a contractor, it is important
to focus on the core services offering on a
continuous basis. But, at the same time, one must
also take invoicing clients and receiving on time
payments equally seriously. Payments are the
lifeline of your business and must be given top
priority. Know more about how to send
professional invoices and get paid on time. You
can also read about time vs project billing from
this post and some key essentials of time
tracking. Choosing an appropriate consultant
online invoicing solution like Invoicera is
helpful in getting a host of interesting features
and sending out invoices in a timely manner.
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