Preparing delicious food is just one small part of your catering business. Equally important is the set of systems and practices that you have put in place to ensure that you receive on-time, complete payments for your hard work. Flawless billing procedures don’t just appear out of the blue; you need to implement them.
Pick an invoicing method
First, ask yourself what you want to use to create invoices. Of course, there is always the paper or manual option. However, this method is prone to errors, leads to difficulties in record-keeping and tracking, and may appear unprofessional and anachronistic.
If your business is very small, predesigned Google, Excel, or Google Docs sheets are a possibility. Although this method requires manual entry and tracking, it can be a viable solution in certain cases.
Dedicated platforms give you ready-made interfaces for creating and sending your bills. Unlike the previous two options, these often allow you to send recurring bills and track the progress of the invoice.
The best option for most catering businesses is accounting software like QuickBooks or FreshBooks. With its ability to integrate with your point of sale system and bank accounts, this software offers professional template options. It also features expense tracking and payment reminders to ensure that you are always aware of each payment status.
Understand invoicing best practices
Now that you have perused invoicing solutions and chosen the right one for your business, it’s time to think about the invoice itself. It should be easy to read and professional, clearly showing your company logo. It should contain your business information (name, logo, address, phone number, email address, and website).
It also needs to display client details. These should include name, billing address, phone number, and email address.
Next, specify your invoice details. These include a unique, sequential invoice number that is essential for tracking, as well as the issuing date, due date, event name, and date services were provided. You also need to list each product or service provided (e.g., alcoholic beverage service, appetizer station deluxe).
Be sure that all quantities, be they hours, units, or product items, are clearly specified. Along with subtotals and totals, also indicate sales tax, discounts, and any down payments that have been deducted.
Along with underscoring the final amount due, you also must provide payment terms and instructions. Describe accepted payment methods, your bank account details for domestic ACH transfers, and instructions for online payments. Then state your policy about any fees or interest that will be charged if the payment is overdue. If applicable, you can also include additional notes.
When to send your invoice
The timing of your invoices is also important. Most caterers choose to send the bill promptly after the event has concluded. If the event is elaborate and costly to prepare, most high-volume payment processing veterans would recommend getting a non-refundable upfront deposit of anywhere between 25% and 50% before the service date to secure the booking and cover some of your preparation costs. This can be invoiced separately or deducted from the final bill.
For services that extend over multiple days, progress invoicing gives you and your client added flexibility. It enables you to bill based on a pre-agreed schedule or specific milestones reached.
For those regular corporate customers for whom you provide services throughout the year, recurring billing may be your best alternative. This enables your client to pay a consistent, pre-set amount on a regular basis, leading to streamlined budgeting and greater predictability.
Invoicing best practices
As a caterer, you probably already have a high-risk merchant account because of the added perceived risk of the industry. This stems from the high average ticket amounts, card-not-present transactions, and pre-service deposits that you take. Instituting invoicing best practices helps to ensure that your company remains solvent and runs smoothly, thus avoiding any added fees or restrictions from your payment services provider.
To that end, send invoices right away. Work hard to design them well, with thoroughness and transparency as priorities. If payments are late, send staggered automated reminders to encourage a fast resolution. Keeping meticulous records and integrating all bills with your accounting and invoicing software are also essential.
High-quality, streamlined invoicing paves the way toward successful receipt of payments. It also helps to foster positive relationships with your customers that may well lead to future business. Focus on your billing today, and this crucial aspect of every event you cater will reflect positively on your company.
North is a leading financial technology company that builds innovative, frictionless end-to-end payment solutions designed to simplify and grow businesses of all sizes. From the front door, to the back office, the developer world, and partnerships that expand the payments landscape, North offers proactive, comprehensive merchant services, in-house processing, and more.
