Optimal cash flow begins with a solid billing process. After all, money won’t flow in unless invoices go out in a timely manner.
Manual methods of collecting time and expenses for a project, calculating invoices, and conducting internal review/approval can all slow down your billing process. Manual invoice calculations to apply different rates for different employees and project types can be prone to errors.
In 4 Billing Blunders Most Companies Make, we looked at the first 4 common billing mistakes.
Here are 3 additional pitfalls to avoid in your billing:
1. Doing ad hoc billing without checking for missing/unapproved time & expenses
If you generate invoices ad hoc, without full service details or data to back them up, you’ll run the risk of inaccuracies, billing in arrears, or failing to bill at all for services rendered.
Companies that lack a single centralized system (or at least tightly integrated solutions) for capturing time and generating invoices have to rely on managers to manually send reports to finance for billing. This situation often leads to inaccurate invoices, sometimes even omitting time or expenses that your company is owed.
Avoid ad hoc billing by automating the approval of time and expense sheets, ensuring those items get billed on time. Failure to approve time and expense sheets on time will lead to billing in arrears.
eBook - Learn to capture and bill for more time. Get Guide
Learn to capture and bill for more time.Get Guide
2. Noting the wrong date on the invoice
Make sure the invoice date falls within the period in which your company performed work or sold products to the customer. Sending invoices with the wrong date (for example, an agreement invoice dated July 15 that covers the month of August) can cause accounting problems for you and (more importantly) your customer.
3. Violating PCI-DSS regulations for securing financial information
Always use a PCI-DSS approved system for processing customer credit card payments and securing their sensitive financial information. Never store credit card numbers in ConnectWise or any other business software solution that is not specifically designed to comply with PCI-DSS regulations.
That’s the last of our 7 most common billing blunders. Now that we’ve identified the tough areas, we’ll explore practical solutions to billing and invoicing in our next two posts. Stay tuned for the Top 10 Billing Practices for Realizing Optimal Cash Flow.