Though many show interest in entrepreneurship, Gen Zers still need to master some of the basics of running a business.
These young adults — born between 1997-2012 — have a lot to learn about invoicing, according to a study released exclusively to Yahoo Finance by Skynova. The survey found that 93% of Gen Zers have asked their parents for help writing invoices in the past, while 53% of Gen Zers didn’t know what to include in their invoices.
Invoicing is an integral skill to learn as Zoomers wade into entrepreneurship and freelancing, experts say. Errors can cost money and jeopardize success.
“Because of common mistakes, many invoices are paid late or not at all. Missed payments are especially hard on brand new businesses,” said Jen Graham, software developer for Skynova. “But long term, these mistakes are worse. They can affect how your clients see you, how they rate you, and whether they will work with you again.”
Overall, Zoomers aren’t the only ones struggling with billing clients. The Skynova report surveyed 1003 workers who had significant experience completing invoices. Over half reported struggling the most with knowing what to include on their invoices.
But due to their limited working experience, Gen Z especially has little familiarity with invoicing. The study found 95% consider themselves “new to the invoice world,” while nearly half only learned what an invoice was in the past one to two years.
“Most people don’t start a business thinking ‘Oh I want to become an expert at invoicing,” Graham said. “Yet for many, it’s one of the first things they need to learn.”
Invoicing mistakes can have steep consequences for both Gen Zers and their companies. On average, Gen Zers have lost $346 to invoicing mistakes. The Skynova survey also found that 92% of invoicing professionals said they would be less likely to continue working with a company that error ridden invoices. Invoicing professionals also characterized those who send error-filled invoices as unprofessional (60%), incompetent (59%), and inexperienced (50%), according to Skynova.
“That isn’t just a self-esteem perception, it’s a real business problem,” said Dr. Corey Seemiller, a professor, researcher, and leading expert on Generation Z. “If your client doesn’t want to come back to you or says bad things about you or gives you a bad review because you can’t seem to figure out how to put something on a piece of paper, that’s a real concern from a financial, revenue-generating standpoint.”
Previous studies show that over half of Generation Z are interested in entrepreneurship. Meanwhile, the number of freelancers in the United States has increased by almost 33% between 2014 and 2022, according to Zippia, a job recruitment site. Seemiller noted that Americans’ tendency to underestimate costs is particularly hard on young entrepreneurs.
“If you’ve been established for a long time, you might be able to take a hit every now and then for under-estimating cost,” she said. “But if you’re young and you’re new and you underestimate costs, you can just go out of business in five minutes if you don’t do it correctly.”
The study lists several ways Americans can master writing invoices. They include using paid software, using free software, taking a class on invoicing/bookkeeping, watching Youtube videos, talking with a consultant, and outsourcing invoicing.
Graham said that invoice writers should begin by “establishing clarity” with their clients to determine how much money they will be charged.
“You should both know exactly what the charges and terms will be, and these need to match exactly with the invoice,” she said. “Any changes to that agreement should be in writing, before the work is done. By the time you get to the invoice, you will already know exactly what to charge.”
Only then, she said, can Zoomers begin the invoice. She advised them to keep a close eye on the details. For instance, she said they should include their contact information and confirm that the due date of the invoice matches the payment terms.
“And don’t forget to give them a method or several methods to pay you,” she said. “If they don’t know where to send the payment, they can’t pay you.”
Meanwhile, Rachel Kirsch, a senior data journalist and project manager on behalf of Skynova, said “practice and repetition” were key for improving invoicing skills. She also encouraged Zoomers to seek out help from others.
“Gen Zers — and members of any generation — can improve their invoicing abilities by first seeking out a mentor at their place of employment to guide them in best-billing practices,” she said. “Moreover, Gen Z employees may benefit from receiving training on what is expected of them regarding invoicing. “
Dr. Seemiller agreed, saying that Zoomers are particularly receptive to mentorship as well as “short, do-it-yourself instructionals.” She asserted that Zoomers prefer learning in a way that gives them a feeling of agency.
“Basically outsourcing the invoicing or having software do it for you, they don’t ever really learn how to do it,” she said. “So I think the things that really hit home with them are I want to learn to do it either from someone like a mentor or I want to watch videos and learn how to do it myself.”
Dylan Croll is a Yahoo Finance reporter.
Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more
Read the latest financial and business news from Yahoo Finance
