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How to bill customers as a new business

Billing customers as a new business can make some owners feel a little awkward. Figuring out what and when to charge each customer can be a bit of a minefield at times. To help you deal with some of the intricacies of billing your customers, FSB has provided you with this short guide.

Make a framework and stick to it.

One of the biggest pitfalls for many new businesses is too much flexibility with their invoicing. They chase up payments with the right level of urgency, and customers may be given to take liberties over how and when they pay you for your work.

How to bill customers as a new business

But if you don’t ensure consistent payment timeframes for your customer it can create significant cash flow problems for your business. Not knowing when your next cash injection will be coming from means you may be less able to plan for the future expansion of your business, or have sufficient cash reserves in the event you’re hit with a sudden and unexpected expense.

One way you can work around this is to be clear with your customers what you expect and when. For example, your payment terms could be kept simple by  taking a small percentage of total cost upfront to create a paper trail and ensure you have some of the capital for the project. You should then make it clear that payment is expected within the first 5 working days of the month.

Your terms could be anything – whatever works best for you. The important thing is that you remain consistent and firm across the board with your customers. However, this goes both ways. If you set terms of payment and expect consistency, then it stands to reason that your customers expect consistency from you as well.

If you tell them you expect payment by a certain point, yet you aren’t prompt with the service you provide them, it isn’t up to the standard promised, or you miss deadlines, then why should a customer feel the need to meet your rules on payment? Your own professionalism will help prove to your customers that you are deserving of prompt payment.

Multiple aspects to consider.

Another major factor when it comes to billing customers is deciding what you actually charge for. You don’t have to make the invoice an exact and to-the-letter reflection of the core service provided; you and your expertise are worth more, and you should know your value in the market.

For example, if your service requires travel while you aren’t technically working during the travel period, it’s still your valuable time that’s being used, and it’s being used as a direct consequence of you providing a service. To that end, you should consider any significant travel expenses to be included in the billing process.

You should also set some limits on what you actually do for customers. If one customer is constantly getting into contact with you, asking for alterations, extra work, etc., then this is valuable time that is unreasonably being diverted away from providing an excellent service to your other customers.

At the end of the day, your business exists because you’ve identified an area with an opening for your service, and you have the skills needed to make it work; you’re skilled enough to know what your time is worth and how to make best use of it.

How FSB can help with your new business billing

There are a many aspects to consider when it comes to what style of business suits you best, and it is certainly a topic you want to give due consideration to.

FSB Creation provides people looking to establish their own business access to a range of services designed to help and support new start-ups. The services we provide can also help make your billing and payment processing procedures easier to manage.

FSB Creation includes access to:

  • A dedicated help and advice line
  • Insurance services
  • Payment services
  • Networking support

To find out more about how you could benefit from FSB Business Creation, get in touch with a member of the team or visit our FSB Business Creation page.

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