Are you sending your customers an unnecessary number of invoices? If your business isn’t taking advantage of consolidated invoicing, you could be. Think about how customers purchase your products and/or services today. Are they making infrequent purchases–where an invoice per transaction is appropriate? Or are they making multiple purchases a day, week, or month and getting an invoice every time they initiate a transaction?
If you answered yes to the second question, you and your customers could benefit from a consolidated invoicing strategy.
What is Consolidated Invoicing?
Consolidating invoicing is where a business creates a process where they specify a time period (or invoice cycle) and batch together all transactions for that time period in one invoice. It’s easier on both parties – fewer invoices for your business to generate and fewer invoices for customers to track down.
Consolidated Invoice Example
You’ve probably seen consolidated invoicing in various billing scenarios, like:
- Your credit card company bundling all charges into one monthly statement
- Cellular bills that include both a fixed monthly fee and one-off charges for data overages
- The local water or electricity utility batching all your usage into one invoice
However, large entities like credit card companies, cellular carriers, and utility providers frequently have the resources to build their system for consolidated invoicing logic or pay for a costly external system. What about businesses without those types of resources?
In many cases, standard invoicing platforms will trigger one invoice per order – rendering businesses helpless in terms of invoice consolidation. Maybe a law firm would like to send a weekly bill for hours consumed, or a medical records company would like to send one invoice that combines all medical records charges into a monthly statement.
Small Businesses Benefit from Invoice Consolidation
Without a consolidated invoicing function, businesses are forced to manually input each transaction or billable item into a consolidated invoice, or send a plethora of invoices to each customer. Either the business has massive time losses due to manual work, or they risk the delay (or total loss) of payments due to customer confusion.
In order to reduce the time burden on staff and cut down on lost payments, be sure to look for an invoicing platform that offers consolidated invoicing logic. When connecting with an order system, standard invoicing logic will create one invoice per order or transaction. Consolidated invoicing logic will allow you to set a specific timeframe – let’s say 30 days – and pull all orders or transactions during that 30-day period into one invoice. After that 30-day period ends, the process starts over.
How to Put Consolidated Invoicing into Practice with Invoiced
With consolidated invoicing, expect to be able to set the timeframe per customer, as each customer may have a different billing cycle. And check to see that the invoicing platform pulls in all the relevant details for each order – a description of what was purchased, the quantity, the price per item, and any other relevant details. You don’t want to trade in one problem (too many invoices) for another (not enough information).
Interested in learning more and want to learn how Invoiced supports a consolidated invoicing strategy? Contact us today for a customized demo.