Ever heard of the saying “learn from your mistakes?” If you’re a business owner, then you better get comfortable with that saying. Failure is pretty much inevitable—no one is safe from it, not even your biggest business idols. The most important thing to remember about failure, though, is that it doesn’t have to stop you from learning and getting back into the swing of things to make your business even better.
In this article I am going to share with you one of my own failures, and how one mistake I made cost me over $4500. By sharing my mistakes, I hope that you can learn from them too.
If you’re a small business or social media marketing agency owner, you DON’T want to miss this!
Get the Back-end Sorted
Many small business owners start their own businesses because they have a vision and a way they can turn their passion into a profitable business. While this goal-driven, big-picture mentality is great, some business owners focus too much on the dream, and not enough on the smaller details of running a company. Of course, mistakes are inevitable, but ensuring you are prepared for ALL aspects of running a business can do a lot to minimize the risk of errors occurring.
However, sometimes no amount of planning and expertise will stop you from fumbling every now and then. And one of the most common mistakes small business owners make is billing. Some agencies or brands are a one man show and mistakes are made. When you’re the only one running the show, it’s much easier for things to fall through the cracks.
In this blog, I’m going to tell you what can happen if you don’t take the time to review your invoice before presenting to your client. Keep this in mind as you start landing clients and sending out bills—this is one of the most important areas of your business if you want to keep finances in order.
If you’re running a business that provides a service for a client, then you’re going to need to figure out how you’re going to invoice those clients. Invoicing clients is one of the most crucial steps to getting paid for the services rendered. And that makes it the most crucial part of running a business.
Getting paid is not only about making profit. In order to take care of the day to day business expenses that go along with running a business—whether it’s a brick and mortar store, or an online business—then receiving payment from clients is essential, as it provides you with cash flow. Without a ready supply of cash, your business will fail.
Fortunately, there is software available that makes the invoicing process so much easier! While using invoicing software is obviously recommended, it’s important to remember that it’s not fail safe. With invoicing software, small business owners can create invoices within seconds. Users can automatically send out online invoices to their clients, while also keeping track of whether an invoice has been paid or not.
But even with fancy software to make the billing process easier, human error will always be a factor in whether or not things will run smoothly. It is possible that you might enter the wrong amount in the invoicing software and your customer will be sent a bill that is incorrect. An incorrect bill will cost your agency in two ways: it decreases your business’s credibility, and it could result in losing a lot of money!
My Invoicing Mistakes
I know the issues that can arise with incorrect invoicing because something similar happened to me in my business.
In my case, I forgot to charge a customer for the final two months of a marketing campaign for blog content. While I had overlooked the final amount billed to the customer, I had also verbally agreed with the customer that he wouldn’t pay more than $25,000 total. In actuality, the campaign should have been at least $28,000, resulting in my agency being shorted by $4,500.
Though it was obviously unfortunate to have to take that loss, the experience is one that has shaped the way I do smaller tasks now. I now know to always look over everything related to money and finances before sending them out to clients, and to also make sure I always get things in writing.
To help eliminate billing confusion with your own small business or agency, make sure each one of your invoices include an explanation of each charge. This explanation should include information such as hourly rate, expenses, or the flat fee for a project. This will help you when you’re double checking your invoice to ensure that you didn’t miss any charges, and help your client see that everything is open and transparent.
Agency and small business owners wear many hats. But when it comes to correctly invoicing a paying customer, it is crucial to make sure that it is clear what the customer is going to be charged and for what services. If not, a simple error in billing could cost your agency or small business a lot of money! Double checking your work, even when it comes to the back-end, administrative details like invoices, is always important and can help to prevent these mistakes from happening.
If you’re ready to start your own small business or social media marketing agency but don’t know how to get it off the ground or how to grow your business, then check out our Digital Marketing Course and enroll today! You can also access helpful content daily by following Cereal Entrepreneur on YouTube, Instagram, and Facebook, or check out our blog for more FREE training.