How to Keep Track of Invoices

The efficient processing and management of invoices is essential to the financial stability of a business, but if done manually, it can be a cause of stress and take up large amounts of time. With invoices coming in and out of a business daily, it's essential that you have procedures in place to track and process them as quickly and accurately as possible. But what's the best way to do this?

What is Invoice Management? 

Keeping track of invoices and payments is part of a wider process called invoice management. This internal business function covers the processing of individual invoices from receipt to payment to organise documents from suppliers and vendors in a way that helps a company manage its cash flow while monitoring its wider financial situation.

The invoice management process begins as soon as an invoice is received. When receiving an invoice, it may be tempting simply to pay it and move on, but verifying the information on the document is essential – so invoice management includes checking that the invoice is genuine and the amount correct. Once verified, the invoice can then be processed. This may involve the accounts department getting the relevant approval to make a payment or matching the invoice to a purchase order. Once payment has been made, the final steps will be to record the details in your financial records and store the invoice for future reference.

How do small businesses keep track of payments? 

Whatever the size of your business, there are several things you can do to make the tracking of invoices and payments less onerous. The most effective steps for small businesses include the following:

1. Digitise

Managing lots of physical invoices isn't feasible for most small businesses, so the quickest way to simplify your invoice management is to go digital. This will enable you to access your financial information quickly, and you'll be able to search for the exact information you need easily. This will also free up valuable time so you or your accounts team can focus on other activities. Digitalisation will also reduce the need for manual data entry and the errors this can introduce.  

2. Invest in accounting software

Opting for software that allows you to organise and manage your invoices will immediately improve your financial processes, reducing the time it takes to create, send and action invoices, and helping to reduce overdue payments.  

3. Follow invoicing best practice

While invoice management may be new to your business, there are best practice guidelines that it's always a good idea to follow. This includes making sure the invoice is clear, accurate and easy to understand, so always provide a description of what the invoice is for and any reference numbers or purchase order details. Make sure your contact details are precise and up to date, and always double-check the payment date. Your software may well generate this automatically, but it's always worth a second look to avoid any payment delays. If you are struggling with late payments, read our blog What to do when your client doesn't pay.  

4. Keep an eye on your data

While organising your invoicing procedures is an excellent step on the road to good financial management, it's still vital that you track your wider company finances regularly. This would include running reports such as profit and loss so you get a wider overview of how the business is performing and can take steps to make changes if the numbers aren't where you expect them to be.

How to choose the right software for your business

While you may be clear on why you need invoice tracking software in your life, choosing the one that will work best for your business can be daunting. So, what should you look for when making this all-important decision?

1. Opt for the cloud

Cloud-based software means you can access your invoices anywhere, whether in the office, at home, overseas or on a job. It also means you'll be able to give access to relevant team members or an external accountant for optimum efficiency. With AccountsPortal, there are no user limits, so you can invite as many additional users to access your organisation's books as you need for no extra charge. You can also assign unique permissions to users, so they only see the features you specify.

2. Look for integrations

Of course, the most useful software will likely offer more than just invoice management, so look for a solution that meets all your needs and offers integrations with other platforms to make your everyday processes even easier. This could include Stripe for online card payments, PayPal or POS software Vend, all of which are available with AccountsPortal.  

3. Think about security

Perhaps the most important consideration when it comes to financial documents is their security, so look for robust software that has been thoroughly tested. It's also worth checking aspects such as data encryption, server protection and how backups are handled. AccountsPortal uses industry-standard 256-bit SSL data encryption; software access to its servers is strictly controlled by firewalls, IP restrictions, security keys and "elevated responsibility" principles; and regular off-site backups are carried out to help ensure that data remains safely stored, with all backups encrypted at rest.

4. Know what you need

It's a good idea to be clear on what you want from your software before you invest, so think about your pain points and how these can be reduced. Also, look for free trials to test the features before you commit. When it comes to managing invoices, tools that reduce the work involved in generating and paying invoices are crucial. This could include the ability to automate invoicing, payment reminders, the ability to make instant payments, and tracking of unpaid invoices. In addition to invoicing, the software should make wider business financial planning and reporting quicker and easier. This could include features such as real-time reporting, the ability to generate profit and loss statements and balance sheets in next to no time, the creation of quotes, and direct links to your business bank account.