Are you billing quickly and accurately?
In some industries invoicing or billing takes place at the point of sale, in others the timing of billing is dependent on more factors.
Often billing is delayed awaiting actual freight charges, verifying that a signed delivery ticket was obtained, verifying pricing, or simply because billing is not a daily process.
Are actual shipping charges necessary to invoice? If your firm charged for shipping and handling, could you speed up the billing process using a reasonable estimate of shipping? Are there online tools that the carrier provides that would allow you to see the actual charge before the physical invoice from the carrier is received?
Make sure your field technicians and delivery personnel submit all delivery receipts at the end of their shift or the beginning of their next shift. If you are in a service business where technicians can be dispatched in off hours, have them maintain a log of all calls and have it submitted with their time sheets. Installing a compensation system that pays a variable rate per call can also ensure the timely receipt of billing documentation.
If your pricing is complicated and requires review prior to invoicing, train appropriate personnel who will be able to price orders before delivery or shortly after the delivery confirmation is received. Communication with those authorized to make price commitments and those responsible for billing is crucial. Your customers want to pay their obligations and keep their records in order, make sure all commitments are timely and accurately shared within your organization.
Bill the correct customer/ ship-to address. Some customers want invoices by receipt location or job. Adjust your invoicing to meet your customer’s needs.
If your customer requires submission of your invoice through their online purchasing system, make sure that process is done in a timely and accurately manner. If you do not match their purchase order, the payment to you may be hung up awaiting resolution. Learn their process and follow it.
Construction companies and military contracts often have very regimented processes and time windows for the submission of charges. You may need to aggregate your weekly or monthly charges and submit with supporting documents by a specific day. Learn the process and adjust your work flow to meet their requirements. Missing their time window by a day can hold up payment for a month.
If billing is not a daily routine, make it a priority. This seems simple but some organizations have allowed the factors above to hold up their invoicing which can translate into the customer delaying payment. Maintain a log of pre-numbered delivery or service documents and make sure all are accounted for and invoiced to the correct customer.
Finally, date your invoice on the day of delivery or service. Some systems will default to the day of billing but customers will often pay based upon the invoice date not the delivery date. Even if it takes a few days to get your invoices out the door, date those invoices consistent with delivery. If you have to credit and rebill, date the rebill and credit using the original shipment date. This will avoid granting additional payment time and make the matching process for the customer easier.
B2B CFO® has over 200 experienced chief financial officers who stand ready to help businesses improve their cash management processes.