Pitfalls of Poor Billing
Tags: MPS   Billing   Tips   Contracts   Productivity  
6/09/2012 4:35 PM

By Paul Blair

Most businesses rely heavily on cash flow and being able to get their billing out and payments in, in a timely manner.

In many cases, this billing is recurring monthly invoices that need to be consistent, correct and delivered to generally the same accounts each month for sign-off and payment. In the event that the billing is not correct, the flow-on effect can be disastrous, but not often something a business measures, or sometimes even realises.

In the past I worked in a services based business that relied heavily on recurring billing to provide its cash flow. A deciding factor in my departure, after 20 years of sales for that organisation, were the constant and ongoing issues created by poor billing and poor software systems that ran the important task of providing the customer with reliable, consistent monthly billing.

The problems created by inaccurate billing are often only measured by the time and inconvenience to fix the problem – but what are the real effects that can hurt your business, and importantly your business’ cash flow?

I have seen first hand the customer’s disbelief that 'another bill' is wrong, or in fact they never even got a bill, but then proceeded to get one a few months later for a much higher amount than they normally allow for in their monthly expense budget.

The negatives from poor billing are enormous:

  • Cash flow not regular and billing payment cycles blow out
  • Dissatisfied customers
  • Easier for the competition to take the business
  • Administration resources taken off task to fix the problems
  • Sales people who should be selling are putting out fires
  • Sales people lose faith and sales revenue suffers
  • Monthly revenue figures affected because of missed billing
  • Often errors force you to provide financial compensation to customers which leads to lost revenue
  • ...and the list goes on!

Can you really afford to be unprofessional?

Recently, I received a call from a disgruntled customer from my previous work life, even though I have been gone since October last year. This is what happened to them:

The new accounts lady received a bill for a twelve-month period, even though the billing was supposed to be monthly. The customer, not expecting such a large bill, was given payment terms because of the error. The next bill arrived, but 5 months later, and alarmingly the cost per copy charge had somehow been inflated by more than double, so that this bill was more than the entire last bill for the year. By the way, that bill was also supposed to be monthly.

Finally, a third bill arrived, back in the monthly cycle, but unfortunately the cost per copy charge had not been fixed. You could imagine how the customer is now feeling! Throw in the fact that an unlucky salesperson had actually been dispatched to them to try and upgrade them because their bill was so high, when in fact it was an accounts error all along. I bet the sales guy enjoyed that pleasant meeting. He would have left with his tail between his legs wondering if he will ever get another deal from them.

In this competitive market you cannot afford to give any reason for a customer to leave, or to give the competition any ammunition to fire at you. The often overlooked accounting and ERP system that runs your business behind the scenes is now more important than ever, and you cannot afford to be left behind using antiquated billing systems that use manual, labour intensive processes to function.

It’s now time to automate and save

Since joining the Happen team and discovering , I have seen the light. There is no need for these problems to occur, there is no need for these pains to be felt and there is no need to torture your customers! Jim2 Business Engine is built to properly bill service contracts – no matter how simple or complicated, or whether consumables are included or not – just simple, no-fuss, accurate and automated billing. Just what your business needs to get your cash flow flowing freely!

The time is here to modernise and push your business to the next level.

About Paul Blair

Paul Blair is a business manager at Happen Business and believes the Sharks will win the premiership this year.

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