Nothing ruins a vendor relationship like an invoice unpaid.
Yet the messy paperwork of invoices can seem like just another problem to deal with when you’re wrapped up in the other daily concerns of business ownership. You need a way to organize your invoices without complicating things.
Here’s our complete guide that makes organizing invoices simple.
Organize By Date
One of the key ways to keep on top of your invoices is to track them by date.
Most invoices have a due date, and you’ll want to settle the invoice before that date. Some invoices are due for payment on an immediate basis, which means you need to pay them at the first opportunity.
Sorting your invoices by due date puts them into a natural order of priority, which means you can always be sure to pay the most pressing invoices first.
Organize by Vendor
Next up, organizing your invoices by vendor can help you maintain your vendor relationships.
This isn’t incompatible with sorting by date, either. You can easily set up folders (digital or physical) to sort by both, grouping invoices by date and then sub-dividing them by the vendor. This is useful if you experience a high flow of invoices, allowing you to prioritize based on the vendor as well as the date.
Vendor-organized invoices can help to protect vendor relationships. In an ideal world, you could treat every invoice as equal. Yet smaller businesses often lack the time or cash flow to process all invoices in this way.
In a high-pressure situation, paying regular vendors as a higher priority than one-off vendors can ensure minimal impact on your vendor relationships.
Use Purchase Order Numbers
Purchase order numbers are an excellent way to get your invoices back on track.
A purchase order number is a unique identifier you should issue to any vendor you work with. It provides an end-to-end way to track a purchase order, from initial purchase through to payment. Many automated systems can link invoices to purchase order numbers, which makes tracking them far easier.
If you don’t already use purchase order numbers, consider introducing them. It will make your life easier.
Prioritize Late Invoices
Of course, the big exception to your meticulous organization system will be dealing with late invoices.
Late invoices need urgent attention. If you become aware of a late invoice, do what you can to resolve it right away. Many vendors charge fees for late invoice payments and they could damage your relationship with the vendor.
Naturally, vendors will also do their part to help you pay late invoices—often by sending you reminders with big red letters on them! If these show up, pay the invoice ASAP.
Organizing Invoices the Right Way
Organizing invoices is one of the foundation elements of a business. Get it right, and everything else will go that much smoother, too. Get it wrong, and you’ll soon find yourself paying late fees and ruining business relationships. With this guide, you can ensure you’re always organized.
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