It generally makes a great deal of sense to centralize all accounting transactions in one place, because a single accounting operation results in a much faster monthly close, and having a single set of experienced accounting staff yields greater efficiency and accounting control. However, the issuance of customer billings can sometimes be a justifiable exception to this rule.
The trouble with customer billings is that, in some cases, the billings can be extraordinarily complex, requiring great knowledge of each funded contract under which billings are being issued. For example, many government contracts require a statement of original funding, the funding vehicle, subsequent change orders, and remaining funding - and all of that needs to be listed on the invoice. There may even be cases where the customer requires a special invoice number, so that it can more easily integrate your invoice into its accounting system. This problem is exacerbated when customers are being served from multiple company offices. This scenario is exceedingly common in the consulting industry, where there are many distributed locations, each with employees who are in a far better position than the central accounting staff to issue detailed invoices.
The solution is to allow employees at the distributed company locations to issue their own invoices, quite possibly using software that does not match the central accounting software. The invoices may even be created using an electronic spreadsheet, if that approach more easily results in the complex invoicing formats required by customers. The outside locations are allowed to send these invoices straight to their customers, while also sending invoice copies to the central accounting facility. The central accounting staff then enters a simplified version of each invoice into the main accounting software, and stores both the simplified and original invoices together, as proof of the transaction.
There are three difficulties with this approach. First, it can be difficult to coordinate the use of invoice numbers among the various locations. One solution is to issue a block of invoice numbers to each location, which no one else is allowed to use. This can prove difficult to coordinate, so an alternative is to set up each location as a separate corporate entity in the accounting system, which allows each location to have its own set of invoice numbers.
The second problem is how to integrate an entirely foreign invoice number into the main accounting system. For example, a customer may insist on the use of an "intelligent" invoice number, which includes the purchase order or task order number, and perhaps the month and year to which the billing is related. This can result in extremely long invoice numbers that do not fit into the central accounting software. The solution is to create a new field on these complex invoices, called a Document ID Number. Anyone using a customer-required invoice number can use the Document ID Number field to enter the invoice number assigned by the central accounting system. When the invoice copy arrives at the central accounting facility, the accounting staff enters the invoice using the Document ID Number, rather than the invoice number used for the customer.
The third issue is control. It is entirely possible that a distributed location can issue incorrect invoices, requiring repeated subsequent changes. There is also some possibility that invoices will be fraudulently issued, perhaps to obtain a performance-based bonus. If these problems occur repeatedly, then either consider on-site training, or else the invoice preparation function should be shifted back to the central accounting area.
From a management perspective, it is likely that the central accounting staff must issue repeated notices to all distributed billing locations that invoicing must be completed in a timely manner. Otherwise, this approach to billing can result in a very delayed close. Nonetheless, despite the concerns raised here, distributed invoicing may be the best method for accurately issuing complex invoices in a timely manner.
If the above approach does not fit into a company's operational style, then consider using a hybrid approach, where the central location issues a simplifed invoice that contains only basic billing information, while the outside location also generates a supporting statement that is attached to the invoice, for subsequent distribution to the customer.
A final alternative is to allow limited remote access to the central accounting software, so that the distributed locations can directly enter their own invoices. However, given the extreme complexity of the invoices involved, it is entirely likely that the invoice template cannot be sufficiently modified to accomodate this approach. Also, if not properly controlled, those people assigned the task of remote invoice preparation may gain access to other parts of the accounting software, and be able to make changes that cause a serious control breach.