Top 10 Best Practices for Billing: The Billing Process as Strategy

billing process as strategyHow strategic is your billing process? Is it designed to increase speed-to-cash, reduce errors and lower bad debt? The billing process is seen as a rather utilitarian function and is often overlooked and under-valued as a strategy.

Typically billing is seen as a very basic and routine process of identifying what should be billed and to whom. However, the apparent simplicity can be deceptive, and many mid-market and enterprise-level companies struggle with it. Particularly when a company is fragmented with multiple divisions and offices or growing rapidly, the challenges are numerous. These can include:

  • How can we make the billing process consistent in terms of look, feel and information?
  • Is the master data for the customer accurate?
  • Are all charges correctly itemised and up to date?
  • Can recurring charges be set-up automatically or are daily reminders required?
  • How can billing cycles match up with client cash flow cycles and process to avoid any unnecessary repetitive follow up and effort?

Here are 10 best practices to improve your billing process.

1. Payment Amount & Due Date Must Stand Out

The customer must be able to quickly scan the invoice and see the amount due and when it is due at a glance. These two items are key to prompt and accurate payment and should be given prominence.

2. Itemise the Invoice Items

Make it easy for customers to see exactly what they are paying for. Include a breakdown of all products or services rendered. Itemised invoices reduce misinterpretation and miscommunication.

3. Check & Check Again

Proof your invoice for typos, currency errors and computational mistakes. In many cases, invoices are sent to collections because the client won’t pay due to an invoicing error. This drives up A/R costs, slows the order-to-cash cycle and is a drain on resources.

4. Offer Diverse, Convenient Payment Options

In addition to payment by cheque, consider offering your customers multiple payment methods including credit card or bank transfer. More payment options improve the likelihood of payment.

5. Encourage Early Payment

Early payment discount schemes can help speed up payment; however, these should be highly visible and easily understandable. Customers may miscalculate or make errors when common discount terms are expressed as “2%/10 Net 30”. Remove any ambiguity by stating the exact amount of the cash discount and the cut-off date to claim this discount.

6. The Contact is Key

The invoice must be sent to the right person, and this isn’t necessarily the project’s point person. Once the contract is signed, ask for the name and contact details of the Accounts Payable person. Be sure to include a telephone number or email contact for any billing disputes, which will ease the demand on collections. These contact details should be checked and verified yearly as a minimum.

7. The Invoice as a Marketing Touchpoint

Invoices should be viewed as customer communications tool. Visually pleasing, the invoice reinforces your brand. At the very least, logo, strapline and contact details should all be easy to spot. The invoice may also be used to highlight promotions or any early contract renewal offers, but not at the risk of extraneous clutter.

8. Make it Trackable & Transparent

Unique invoice numbers, digitalisation of the A/R process and a single-view accounting platform makes it much easier to record, track and follow-up on payments.

9. Timing is Everything

Invoices should be sent out as per the contract schedule or immediately upon completion of the project. There should be no delays. Timely invoices drive timely payments.

10. Follow Up On Larger Invoices

For large balances and key accounts a courtesy follow-up call to confirm the bill has been received helps ensure prompt payment.

Finally, the 11th rule is to train your staff. Billing is frequently an entry-level position, and without proper training error rates increase, invoices can be misfiled or sent to the wrong people. The best way to support efficient billing is to ensure that all team members have access to written policy guidelines and are trained in the correct procedures. Equally as important, your billing staff must be customer-centric, as they often deal with complaints and dispute resolutions.  Your employees need to get the right balance between stating policy and providing the right level of customer experience and satisfaction.

If your company is considering world-class Order-to-Cash outsourcing, supported by outstanding customer service, talk to us to learn more or contact us for a free assessment of your Order-to-Cash processes.

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Simon Speirs (29 Posts)

Simon is a member of the Association of Chartered Management Accountants (ACMA) with 18 years of experience in improving business and finance team performance. He has worked in a number of blue-chip companies including ABB, Accenture, PricewaterhouseCoopers and Hewlett Packard. Simon leads the design and implementation of back-office solutions across the European Region for Sutherland. He has a proven track record of designing and delivering shared service solutions and managing complex global projects. Simon’s experience spans across continuous improvement, finance & accounting, procurement, sourcing and IT management. The depth and breadth of his experience enables him to combine People, Process and Technology to design optimized and customized outsourcing solutions.


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About Simon Speirs

Simon is a member of the Association of Chartered Management Accountants (ACMA) with 18 years of experience in improving business and finance team performance. He has worked in a number of blue-chip companies including ABB, Accenture, PricewaterhouseCoopers and Hewlett Packard. Simon leads the design and implementation of back-office solutions across the European Region for Sutherland. He has a proven track record of designing and delivering shared service solutions and managing complex global projects. Simon’s experience spans across continuous improvement, finance & accounting, procurement, sourcing and IT management. The depth and breadth of his experience enables him to combine People, Process and Technology to design optimized and customized outsourcing solutions.

4 thoughts on “Top 10 Best Practices for Billing: The Billing Process as Strategy

  1. Isn’t it better to use all online invoicing procedures with the help of an app? I’m apparently observing a sudden shift from paper to paper-less invoicing. It’s prevalent here in Zurich. People are starting to adapt e-invoicing. It makes invoicing less tedious and automated.

    How cool would it be if you could schedule your invoices or may be set a recurring profile to bill clients automatically and get paid. Great, no?

    • I think online invoicing is a great idea, We are developing such a system for our various internal services. It would also include an interface to internal systems to transfer payments from one account to another. It would allow both service provider and client to view this information online. Other features are online tracking and integrated reporting.

  2. This is a great list! This can be used to vet the user requirements to optimize our invoicing and billing practices (which would be enabled by software to embed the business rules). The sooner you get paid/credited, the better. . .

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