You recently completed a stunning reno, but you’ve been waiting…and waiting…for your client to pay you.
Anxiety sets in because you’ve got to pay your people and you need cash flow to keep other aspects of your business running.
What to do?
Running a construction business isn’t just about swinging hammers and crafting beautiful spaces. It’s also about keeping your cash flow steady so you can pay your team, manage your materials, and grow your business. For contractors, one of the biggest factors in maintaining that steady cash flow is invoices.
And while invoicing might seem like a small piece of the puzzle, it plays a huge role in whether or not your business runs smoothly.
If you’ve ever been frustrated by late payments or cash flow gaps, you’re not alone. Many contractors, like yourself, struggle with invoicing systems that just don’t work well enough to keep money flowing in regularly. But don’t worry—we’ve got you covered!
In this article, we’re going to break down seven simple yet powerful invoicing tips that will help you get paid faster and keep your business financially healthy.
Ready to start streamlining your invoicing process and avoiding those dreaded payment delays? Let’s dive in!
Tip 1: Send Invoices Immediately After Job Completion
You know how great it feels to wrap up a project. The job’s done, the client’s happy, and now it’s time to get paid. But here’s where many contractors slip up—waiting too long to send out the invoice. The longer you wait, the more likely it is that payment gets delayed. That’s because clients can forget, lose track of what’s owed, or simply push it down their to-do list.
By sending the invoice right after the project wraps, while the work is still fresh in your client’s mind, you increase the likelihood of getting paid promptly. Plus, it shows professionalism and keeps everything organized.
If you’re thinking, “I’m too busy to send invoices right away”—consider setting up a simple invoicing template. That way, you can quickly fill in the details and hit send. Trust me, it’ll save you time and help prevent cash flow problems down the road.
Remember, invoicing is more than just a task to cross off your list. It’s the lifeline that keeps your business running smoothly!
Tip 2: Break Down Large Projects into Milestone Payments
Big projects mean big rewards—but they also mean big risks if you’re waiting until the very end to get paid. Imagine completing a massive renovation, only to sit around waiting for that final check. Talk about stressful! That’s why breaking down larger jobs into milestone payments is a game-changer for contractors.
Instead of invoicing once at the end of a project, try setting up payment intervals at key stages of the work. For example, you could request an initial deposit, a payment after demolition or framing is complete, and then a final payment upon project completion.
This method ensures that you’re regularly bringing in cash throughout the project, which keeps your cash flow healthy and reduces the risk of non-payment at the end.
While progress billing keeps your finances in check, it also keeps your clients more invested in the process. They’ll see the progress and feel confident paying for each phase as it’s completed.
Think of it like a steady paycheck for your business instead of waiting for one big payday—and we all know how good steady pay feels!
Tip 3: Be Clear and Detailed on Every Invoice
Ever received a bill that made you scratch your head, wondering what on earth you’re paying for? It’s frustrating—and that’s the last thing you want your clients to experience. Clear, detailed invoices not only prevent confusion but also help avoid disputes and delays in payment.
For contractors, this means breaking down the services and materials in a way that’s easy to understand. List everything out:
Labor
Materials
Hours worked
Even project milestones if they apply.
For example, instead of saying “renovation work,” specify what that includes: “demolition, new drywall installation, painting,” and so on. Don’t forget to include dates and any relevant details about what phase of the project the invoice covers.
Clear communication helps your client see the value of your work and ensures they know exactly what they’re paying for. It also gives them fewer reasons to delay payment or come back with questions that slow everything down.
Remember, a well-organized invoice shows that you’re running a tight ship—and clients appreciate that. The clearer you are, the faster they pay!
Tip 4: Set Clear Payment Terms and Enforce Them
If there’s one thing that can cause serious cash flow headaches, it’s unclear payment terms. Let’s be honest—nobody likes chasing clients for payments. But without clearly defined terms, you might find yourself waiting (and waiting) for that check to arrive.
When you lay out your payment terms upfront, you set the expectation from the get-go. This means clearly stating when payment is due (Net 15, Net 30, etc.) right on the invoice, as well as any late fees for overdue payments. Believe it or not, clients are more likely to pay on time when they see consequences for delays—like a percentage fee for late payments.
However, setting terms is only half the battle. You need to stick to them! Don’t be afraid to enforce those deadlines and penalties. It’s about running your business professionally and making sure you’re not left high and dry when it comes to payments.
Being clear about payment expectations isn’t pushy—it’s just smart business. When clients know exactly when to pay and what happens if they don’t, you’re more likely to avoid cash flow gaps.
Tip 5: Offer Multiple Payment Methods
The easier you make it for clients to pay, the faster you’ll get paid.
In today’s world, flexibility is key. Some clients prefer paying by credit card, while others are all about bank transfers or online payment platforms. If you’re only offering one option—like checks—you could be slowing down your own payment process.
By giving clients several payment options, you make it simple for them to settle up quickly. Whether it’s ACH transfers, credit cards, or online portals like PayPal or QuickBooks Online, flexibility shows that you’re accommodating and professional.
Not only does this improve your cash flow, but it also sends a message to your clients: We value your time, so we’re making this as easy as possible for you.
A non-stressful payment process makes for happier clients. And happy clients tend to pay on time!
Think of it as eliminating excuses for delays. The more ways they can pay, the fewer reasons they’ll have to put off sending that money your way.
Tip 6: Track and Follow Up on Overdue Payments
No one enjoys following up on unpaid invoices. But if you don’t stay on top of overdue payments, they can quickly pile up and create serious cash flow problems. The key here is to be proactive, not reactive.
Set up a system for tracking your invoices. Whether it’s a spreadsheet, a dedicated invoicing app, or accounting software like QuickBooks Online, knowing exactly what’s been paid and what’s still outstanding is crucial.
Don’t let unpaid invoices fall through the cracks—schedule reminders to check in on overdue payments regularly.
When you do follow up, keep it professional and polite. Sometimes, a simple reminder can move an overdue invoice to the top of your client’s priority list. Just because a payment is late doesn’t always mean there’s bad intent—it’s often just an oversight.
Staying organized and tracking payments closely helps you avoid the stress of unpaid bills and keeps your cash flow steady. Deborah Mawson Bookkeeping can keep your financial records up to date, which helps you manage and follow up on unpaid invoices.
It’s all about making sure you’re getting what you’ve earned!
Tip 7: Use Automated Invoicing Tools
Automation is one of the best ways to save time and reduce errors when it comes to invoicing. If you’re manually creating and sending invoices, it’s easy to let things slip through the cracks or make a mistake. That’s where automated invoicing tools come in to save the day!
With tools like QuickBooks Online, FreshBooks, or Jobber, you can set up recurring invoices for ongoing projects or send invoices automatically as soon as a job is complete. Many of these tools also offer built-in payment reminders, which can help reduce the need for those awkward follow-up conversations.
Not only does automation keep things running smoothly, but it also helps you avoid delays caused by human error.
Plus, the time you save by automating your invoicing can be put back into the things that matter most—whether that’s growing your business or enjoying some well-earned downtime.
For contractors juggling multiple projects, an automated invoicing system can be a lifesaver, keeping things organized and ensuring payments come in without the hassle!
Ready to Improve Your Cash Flow? Start With Better Invoicing Today
Invoicing might not be the most exciting part of running a construction business, but it’s one of the most critical for keeping your cash flow healthy and your operations running smoothly.
By applying these seven simple invoicing tips, you can significantly reduce payment delays, avoid cash flow gaps, and spend less time chasing down clients for money.
Whether it’s sending invoices immediately after project completion, breaking up large jobs into manageable payments, or using automated tools to streamline the process, every small step helps ensure you get paid faster and with less hassle.
Remember, while invoicing is key, it’s just one piece of the puzzle. Having a solid bookkeeping system in place is equally important for maintaining a clear picture of your financial health.
That’s where Deborah Mawson Bookkeeping comes in. With accurate, up-to-date financial records, you’ll always know exactly where your business stands, giving you the peace of mind to focus on what you do best.
“Working with Deb has been a delight. She has been incredibly helpful, reliable, and responsive, which has allowed me to focus on running my business.”
~Cory Winter
Ready to make your life easier and keep your business financially sound? Schedule a free discovery call with Deborah Mawson Bookkeeping today and take the first step toward stress-free financial management.
