It is entirely possible for a company to issue products or services, and then to not issue a corresponding invoice. Here are some of the problems causing missed billings, and how to avoid them:
- Orders not entered through standard system. How many times have you seen a salesperson walk a customer order around the order entry department and straight to the warehouse, just to ensure that a delivery takes place as soon as possible (or worse, they hand-carry it to the customer, so there is also no shipping record)? When this happens, there is no record of a customer order in the computer system, so there is no indicator of an unbilled order that would normally flag some form of investigation by the accounting manager. The only solution is to require everyone at every step of the order fulfillment process to force anyone circumventing the system to return to the order entry department, where the order will be properly entered into the system.
- Billable hours changed after the fact. Employees have a habit of going back into the timekeeping system and altering their billable hours after the billing period has closed. I avoid the problem entirely by locking down access to timekeeping periods in the previous month, so that no changes can be made.
- Late timesheet entry. We badger the staff starting on Monday to ensure that they have entered their hours for the preceding week. Each reminder is escalated, first to the H/R manager, then to the local supervisor, and then to the company president (hardly ever gets this far, but anyone contacted by him is rarely a problem again). This approach is far better than waiting until month-end to remind people, because they tend to forget what they did if too much time has passed.
- Automated reminders. Have the timekeeping system automatically send e-mail reminders to anyone whose timesheet has not yet been entered. We have not yet implemented this one, but it is on the drawing board.
- Shipping notices stuck together. This one sounds stupid, but have you ever seen glue or gum sticking multiple shipping notices together? Alternatively, they may be mistakenly clipped or stapled together, so the shipping notices on the bottom of the stack are never seen by the billing staff, and so are never billed. To avoid this, consider having a second billing clerk skim through the daily batch of shipping notices from the shipping dock, and compare them to the daily invoice run to see if any shipping notices were missed by the first billing clerk.
- Formalize sample shipment authorizations. Most shipping logs contain entries for the shipment of free samples, which are usually authorized by the marketing department. If the accounting staff is regularly reviewing the shipping log to ensure that all shipments are billed, these special deliveries require a considerable amount of investigation to verify. To reduce the work level, require the marketing department to issue a sales order through the normal order entry system for all free deliveries, so the accounting staff can more easily trace the authorizing documentation.
- What about customer on-site pickups? The standard system for invoicing assumes that the shipping dock sends a shipping notice to the billing staff, which triggers an invoice. But what if the customer shows up to take delivery? This is easy enough for a retail establishment, but can cause fits for a company whose systems are designed for freight deliveries to customers. If the solution is manual handling of each case, then the odds of not billing a customer pickup are extremely high. The solution is to direct customers making their own pickups to the shipping dock, so that the shipping personnel (who are the most experienced in documenting shipments) will handle the "delivery" to the customer, and who can be relied upon to fill out the usual paperwork and forward it to the billing staff in the normal manner.