Do you have an invoicing policy? What day do you send out invoices?
Did you know that you can improve your cash flow by invoicing on specific days of the week or month?
From analysing 300,000+ invoices, the key lessons to get paid faster:
- if you invoice weekly or fortnightly – send invoices on the weekend;
- if you invoice on a monthly basis – send invoices on the 1st of the month.
WEEKLY & FORTNIGHTLY INVOICING
We found that a lot of companies invoice as jobs come in. Whilst it is good practice to invoice as soon as you reach key invoicing milestones, it can be inefficient.
94% of invoices were sent out during the working week. Between 17% to 20% of invoices were sent out each weekday, with no major differences between days.
It should be more efficient to set aside a certain day of the week to do all your invoices for the week. This way you only do each part of invoicing once - look through your work-in-progress (or job sheets), load up your invoicing software, etc.
If you issue invoices on one day of the week, the data suggest that you should send invoices on the weekends to get paid faster. You can improve your cash flow significantly, as invoices sent on weekends are generally paid within 29 days, a full 10 days faster than invoices sent on Tuesdays, Thursdays and Fridays!
Sometimes you have monthly invoicing jobs. We noticed that companies either issue invoices:
- at the end of the month (around the 30th and 31st) – 16% of invoices;
- at the start of the month (1st of the month) – 11% of invoices.
For your future monthly invoicing, the data suggest you should always issue invoices on the 1st of the month rather than the end of the month. Invoices issued on the 1st of the month were paid in 30 days. Invoices issued on the 30th and 31st were paid in 38 and 37 days respectively. By issuing invoice on the 1st, you will improve your cash flow by getting paid a whole week faster!
If you are game to try this, let us know how you are getting on. If you find this useful, share it on Twitter (Click to Tweet). Also, see previous blog post about getting paid fasted by offering 7 or 21 day terms (Click Here).