entry-level and midmarket accounting
and ERP systems simply don’t have this
type of functionality.
As an alternative, you could implement
a credit and collection system such as
Anytime Collect to notify you when an
invoice for a customer is missing a purchase
order number. Simply define an action for
a customer (or group of customers) that
checks to see if the customer requires a
purchase order number and then checks
to see if the invoice has a purchase
order on it. If the invoice does not have
a purchase order, the system can create
an alert notifying you that you will have
a problem getting payment, and you can
address the issue very early in the process
before the invoice is past due.
Never Received The Invoice
The problem is that some systems only
support a single contact, and the invoice
may be sent to the wrong person if
the primary customer contact is not
the accounts payable contact at your
customer. A related problem occurs when
a subsidiary purchases or approves your
product or service order but a parent
corporation is responsible for payment.
In these situations you need to send the
invoice to both the person who authorized
the purchase as well as the person with
the authority and responsibility to process
the payment.
You may want to send multiple copies of
the invoice through different avenues for
customers who frequently use the excuse
that they didn’t receive the invoice. You
can choose to print and mail invoices to
certain customers. Further, you can setup
customers with online access to a secure
customer portal where they can get their
invoices themselves. The system can even
email them an encrypted hyperlink that
takes them directly to their online account
where they can review the invoice and
make a payment online without having to
log-in to the portal thus eliminating the
inevitable excuse that they lost or forgot
their user name and password.
Late payments due to invoice disputes
can have a significant impact on your
cash flow. While debtors stay on your
balance sheet as an asset, it does you no
good whatsoever when you have no cash
in the bank to pay your employees, your
vendors and to oil your basic operations.
highly segmented accounts payable
departments, and the process of releasing
payment could take several weeks. It’s
critical that you send invoices to customers
more frequently to ensure that you’ve
done your part to ensure that they have
adequate time to pay you before the due
date.
While it may be unreasonable for you
to process invoices every day, you can
automate the invoice delivery by simply
entering the invoices into the accounting
system more frequently. Systems like
Anytime Collect can be configured to
synchronize invoice information directly
from your accounting system on a daily
basis (or more frequently if needed).
Getting It To The Right
Person
Another common reason why customers
pay late is that you’re sending the invoices
to the wrong person or to the wrong
address. This happens all the time. This
could be a valid reason if you haven’t
done business with a customer in a while
and they happened to have moved since
the last time you sent an invoice. These
situations will occur but are also avoidable.
You may consider contacting every
customer at least every few months to
continue building your relationship with
the accounts payable person.
Another reason that customers don’t pay
on time is that they don’t get the invoice
soon enough to process an on-time
payment. This is especially true for most
small businesses that process invoices less
frequently than larger companies. You could also integrate your sales force
into the credit and collections process,
since the sales rep should be talking to
your customers more frequently than your
accounts receivable team. Anytime Collect
allows sales reps to access the system in
a similar manner as your customers via a
secured portal. Sales reps can review their
assigned accounts and make internal notes
for the credit and collections team - such
as notes on when a customer is planning
to move and their new address.
Larger business customers often have You may also fail to send the invoice
Sending Invoices Too Late
88 MAL34/20 ISSUE
to a customer if you rely too heavily on
the internet to verify addresses, and you
don’t have a formalized business credit
application process. Far too often someone
sells something to a customer and they get
an address off the corporate website not
realizing that the address on the website
is different than the billing address. Make
sure that you talk to your customers and
verify that the invoice is being sent to the
right person at the right location, and
you’ll alleviate a lot of headaches in the
future.
Sloppy Invoice Design
Many companies use the invoice templates
provided
out-of-the-box
by
their
accounting software publisher. While the
accounting software may be just fine, most
accounting systems provide notoriously
bad templates for business forms such
as invoices. Customers that struggle to
understand your invoice will push it to
the bottom of their pile and will pay other
bills first before (eventually) calling you or
waiting for you to call them.
It is very easy for you to identify this
problem if you simply talk to your
customers, and ask them if they have any
problems understanding your invoices,
asking what you can do to make it
easier to read and easier to understand,
reducing past due accounts receivable,
while improving customer satisfaction and
retention.
No Contact
There simply is no excuse for failing to
communicate with a customer that has a
past due account. If you’re manually trying
to manage the process, you’re wasting a lot
of time.
Anytime Collect can be setup to prompt
you to call all new customers so you can
build a relationship and explain your