Invoicing is a complex and challenging process, yet necessary in a business. Every month’s end period is crucial to the Accounts Payable Department especially when verifying and reconciling invoices. Oftentimes, they would encounter problems when tracking down lost invoices and payment status. These are known problems that would result in time inefficiency and unproductivity, and worst, affect the business relationship between vendors and customers. Those recurring issues are harmful to your company’s image, but you can choose to avoid them.
If you have experienced these circumstances, I’m sure you know what I’m talking about. Now, the question is what are the steps you have done so far to prevent those? If you think you’ve done enough, but still you are encountering and hearing the same problems, check out the information below which might be helpful in your current situation. In this writing, we will discuss the most common problems when it comes to invoicing and as we go along recommendations on how to solve them would be included. These are the essentials you have to know to mitigate recurring issues and totally avoid them from happening.
Non-Digital Invoices
If you are not yet convinced to embrace the digital era, this could be the perfect time for you to adapt for your business benefit. Sending paper invoices via snail mail or courier requires much time to wait and money is involved. Also, it’s indeed difficult for you to track down if you have enormous piles of papers to search when tracking down missing invoices and not to mention the high paper costs. The best solution would be to send digital documents. Get some free templates online which can be your standard format for all of your invoices to be provided to your different vendors. In this generation, this is a cost-effective way to send invoices as it would speed up the process and save your company valuable time and money. You can also customize it later on based on the business needs and standards.
Missing Invoices
This is one of the most frustrating issues of Account Payable when a vendor calls in asking for the payment status, but then the invoice being referred to hasn’t been recorded in your end. Oftentimes, it would end up duplicate invoices being paid. You have to check why invoices are not making it through to the Accounts. This could be a problem of having no centralized system to generate or track down monthly statements. Consider having a cloud-based storage platform which is a convenient way of sending and saving invoices. A reliable storage system can help you minimize lost invoices and its domino effects. Having the same platform accessible by your vendors would be time-efficient. They can easily access and if they’ve questions, you can easily locate the specific invoice.
Confusing Invoices and Lack of Information
This could be a factor why your customers have delayed payments as they don’t clearly understand what they are billed for. When creating your invoice, make it as simple as possible with all of the necessary information. Use products and service terms that are being advertised in the market and not the jargon terms which are just commonly used internally. Instead of using product codes, it’s best to include the full product name or short description of the service. Do not forget to include your company details such as the logo, company name, address, phone numbers or email addresses. Ensure that you have consistent branding and format. In this way, it’s easy for your vendors to identify what they have billed for and the company they have to pay.
In addition, make sure that each invoice you generate for your customer has its own reference number. Do not just rely on the amount and the date when it was released. This could be confusing in the end when your vendor decides to pay all of the invoices all at once or just provide partial payment. This could be a challenge for you to track down if all products and services are being paid and which are not. Therefore, to address and avoid this issue, include in your process to have a reference number on a specific invoice which should be indicated upon payment. In this case, both parties will have a convenient way to monitor faulty invoices, missing payments, and accessible references.
Lots of invoicing processes have huge revisions to be done to reach the efficiency standard. The first step is to completely adapt the digital process to streamline the needed work. Learn how to directly address the source of the pain points instead of just having temporary workarounds. Your business would benefit the most if you start thinking about how to make your business workflow as smooth as possible.