What Is an Open Invoice? A Quick Guide
If you run a small business, you’re going to have a steady stream of open invoices at almost all times. These open invoices are going to be a good indication that your small business is flourishing.
So, what is an open invoice? Well, an open invoice, which is also sometimes called an outstanding invoice, is an invoice that you’ve sent to a customer requesting a payment for them. You can use open invoice software to keep tabs on your open invoices and to ensure that they get paid in a timely fashion.
Today, we’re going to talk more about open invoices in our open invoice guide to tell you more about them. You can find out all about what they are and how they work below.
What Is an Open Invoice?
Before we get into talking about how exactly open invoices work, we just want to make sure that you know the answer to the question, “What is an open invoice?”
An open invoice is any invoice that has not been paid yet by a customer. Generally speaking, customers will have somewhere between 30 and 90 days to pay off an open invoice. So your small business is typically going to have any number of open invoices open at one time.
How Do Open Invoices Work?
Now that you have a better understanding of what an open invoice is, let’s discuss how they work. Here is the process that you’ll go through when it comes to open invoices:
- You provide products and/or services for a customer for an agreed-upon price
- You create an invoice for a customer charging them for your products and/or services
- You either give an invoice to a customer in person or send it to them in the mail
- You now have an open invoice on your hands
- You keep tabs on an open invoice to be sure that it eventually gets paid
You’ll repeat this process over and over again for every customer that you have. It’ll make sure that your small business is paid for the products and/or services that you provide for customers.
What Can You Do to Close Open Invoices Quicker?
Your goal as a small business owner is going to be closing open invoices as quickly as you can. That way, you’ll always have money coming into your business.
You should strive to create open invoices for your customers as quickly as you can. That should put them in a position to pay you quicker than they might otherwise.
You should also look into using what is called accounts receivable financing to your advantage if you’re ever in a bind and need cash fast. This type of business funding will enable you to use your open invoices as collateral while securing the funding that you need.
Visit yourfundingtree.com to discover more about how you can use open invoices in this way.
Staying On Top of Open Invoices Is Very Important for Small Business Owners
You aren’t going to be a very good small business owner if you don’t know the answer to the question, “What is an open invoice?” If you need to have an open invoice explained to you, it means that you’re probably not doing enough to collect the money that customers owe you.
Use all of the open invoice tips and tricks that you’ve learned about here to your advantage. It’ll help you keep track of your open invoices more effectively and keep money coming into your company at all times.
Get more small business advice by browsing through the other articles found on our blog.