One of the goals of every business, whether big or small, is to collect payment on time. According to the U.S. Bureau of Labor Statistics (BLS), nearly four out of ten businesses fail in their first five years. There are a lot of factors that cause a business to fail, such as the lack of market need for products or services, lack of liquidity, poor management, and tight competition. However, cash flow problems remain the topmost reason why small businesses close down. About 8 out of 10 businesses closed down due to cash flow trouble.
So, if you want your business to succeed and grow, you need to focus on the billing process – a critical component to beef up your cash flow. Effective billing requires proper planning, coordination and implementation.
Billing is a crucial part business as it ensures steady cash flow which is then used to fund its operations. However, managing enterprise billing can be a nightmare.
Billing and invoicing is more than just sending out invoices and then stacking them on one pile. You need to develop a strategy to create, send, and track all invoices and collectibles. This way, you are assured that you get paid adequately and on time.
If you are struggling with your enterprise billing, here are three proven strategies to help you effectively manage enterprise billing.
Ensure accurate customer data
When it comes to invoicing, accuracy of data is critical. Why so? For example, if you send out an invoice to a wrong recipient, it won’t reach its intended customer and result in late payment. Incorrect units of measure, pricing, quantity and the likes can cause serious problems. Aside from delayed payment, such errors causes distrust and can negatively impact your business. So, before sending out any invoice, information should be double-checked and validated.
Creating a centralized database for your customer accounts is important in establishing and maintaining an effective invoicing process. With a centralized database, you can easily access customer information and input them into your billing. This should also help you regularly check and update customer accounts, scrutinizing for possible anomalies such as incorrect discount, credit limits, payment terms, etc. Effective security measures must be in place to prevent unauthorized access of the data.
Establish a clear, streamlined invoicing process
To effectively manage enterprise billing, you need to have a straightforward billing process. Establish a step-by-step process that will guide your company. Eliminate unnecessary bottlenecks (or red-tape) in the process, such as repetitive paperwork or approvals.
The earlier you send the invoice, the earlier you get paid. So, don’t delay generating statement of accounts. In fact, customers even appreciate early billing as it gives them ample amount of time to review the invoice and prepare their payment.
You need to clearly communicate the billing procedures to everyone in your team. Train everyone with direct role in the billing process on the use of tools, technologies, and documents related to it. The key to effective invoicing lies on the people who runs and oversees the process. If they know what to do, things will get done much faster and with great results.
Some organizations have impressive billing process but still encounter cash flow problems because their staff’s lack of awareness of their policies. It is just as disastrous as the lack of an established invoicing process. And even if your business already has an established billing system, it still needs to be regularly reviewed and updated to identify any problems and further improve the process.
Automate the process
Automation is probably the single most important strategy to effectively manage billing. There are numerous types of software such as enterprise billing system Kansys Edge and other forms of technology such as spreadsheets that can help automate your invoicing.
As much as possible, you need to automate every manual intervention to ensure accuracy and reliability of your billing process. Employee’s involvement can be limited to encoding the data and the rest can be digitized. Billing software is a powerful tool that can help make running a business a lot easier. With this program, you can create and send invoices in a timely manner. It also allows you to access data as necessary.
There various software solutions that you can find online. Choose one that best meets your unique business needs. In fact, the software can even be custom-developed for your enterprise. Although billing software programs are expensive, when you consider their benefits, you’ll know that it’s a worthwhile investment.