What metrics should you track to become an invoicing expert?

1 Accuracy rate

One of the most important metrics to track is your accuracy rate, which measures how often you produce error-free invoices. Errors can lead to delays, disputes, and lost revenue, so you want to minimize them as much as possible. To calculate your accuracy rate, divide the number of invoices you sent without errors by the total number of invoices you sent in a given period. Aim for a high accuracy rate, preferably above 95%, and track it over time to see if you are improving or not.

2 Turnaround time

Another metric to track is your turnaround time, which measures how quickly you can generate and send invoices to your clients or customers. A fast turnaround time can improve your cash flow, customer satisfaction, and reputation, as well as reduce your workload and stress. To calculate your turnaround time, subtract the date you completed the work or delivered the product from the date you sent the invoice. Aim for a low turnaround time, preferably within a week or less, and track it over time to see if you are speeding up or not.

3 Payment rate

A third metric to track is your payment rate, which measures how often you receive payments for your invoices on time and in full. A high payment rate can ensure your financial stability, prevent bad debts, and foster trust and loyalty with your clients or customers. To calculate your payment rate, divide the number of invoices you received payments for by the total number of invoices you sent in a given period. Aim for a high payment rate, preferably above 90%, and track it over time to see if you are increasing or not.

4 Collection time

A fourth metric to track is your collection time, which measures how long it takes you to receive payments for your invoices after you send them. A short collection time can improve your cash flow, reduce your risk of non-payment, and free up your resources for other tasks. To calculate your collection time, subtract the date you sent the invoice from the date you received the payment. Aim for a short collection time, preferably within 30 days or less, and track it over time to see if you are reducing or not.

6 Automation level

A sixth metric to track is your automation level, which measures how much you use software or tools to streamline and simplify your invoicing process. A high automation level can save you time, money, and effort, as well as improve your accuracy, speed, and consistency. To measure your automation level, you can use indicators such as the number of invoices you create, send, and track automatically, the number of payments you process and record automatically, and the number of reminders and notifications you send and receive automatically. Aim for a high automation level, preferably above 70%, and track it over time to see if you are advancing or not.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?