Practices that are critical to your business’ financial health include efficient and accurate billing practices. Revenue leakage, cash flow shortages, and customer attrition are all side effects of billing errors or delays. Whether it’s been a while since you reviewed this function, or your company is struggling with billing issues, now is a great time to review your processes and make any necessary upgrades.
At The Root
Often, billing issues stem from inadequate systems and processes. Assess your billing practices to help ensure you’re:
- Invoicing customers for the correct amounts and applying any promised discounts
- Paying attention to customer complaints and taking immediate steps to resolve them
- Tracking errors to identify trends
- Verifying account information to help ensure invoices are addressed correctly
- Setting clear standards and expectations with customers (both verbally and in writing) about your policies regarding pricing, payment terms, credit, and delivery times
In addition, train employees to enforce billing policies properly. They should ask customers to pay any portion of a bill that isn’t under dispute. And once a dispute is satisfactorily resolved, they need to ask the customer to pay the remainder immediately.
Rising billing disputes may signal a deterioration in the quality of a company’s products or services. Damaged or late orders may give customers an excuse not to pay their bills. The same goes for services that aren’t provided in a timely or professional manner.
Flexible Schedules & Tech Solutions
If your business is invoice-based, know that regularly sending out bills late can harm collection efforts — so timeliness is critical. Traditionally, many businesses have offered 30-, 45-, or 60-day payment terms. But this may have changed in your industry, particularly now that most billing is done electronically. What’s more, many companies permit their most important or largest customers to negotiate customized payment schedules. If you adopt this practice, adjust your cash flow expectations and projections to recognize such variances.
Both small and large businesses generally use automated billing systems these days. But if your company employs manual methods, we strongly advise you to find a technology solution that lets you easily send electronic invoices and receive paperless payments. Doing so can reduce labor-intensive work, improve recordkeeping, and expedite payment. As with any technology, however, you’ll need to review it from time to time to determine whether it continues to meet your needs or if better options have become available.
We Can Help
Contact us for billing software recommendations. We can also help you identify potential billing issues early — before they escalate into cash-flow problems, customer disputes, or even legal complications.
