In some ways, a business lives or dies by its invoice methods. Consistent, efficient and trackable invoice management keeps businesses out of trouble, whether that means staying out of the red or avoiding unwanted attention from the law.
But no business is perfect, and invoice payment issues do happen. They can be as simple as someone forgetting or procrastinating with an invoice follow-up. But they can involve more complicated reasons ranging from human error to computer glitches.
There are seven general errors that these mistakes fall under, and fortunately, there are fixes for all of them.
Three Big Sins Of Invoice Payment
1. Entering the Wrong Details
Anyone can make mistakes entering details under numerous circumstances. However, data entry mistakes are not always a small matter and can add up significantly in the long run.
Just about any detail entered wrong can pose a problem: names and addresses, invoice numbers and dates, product or service codes. All of this data, if processed incorrectly can skew the total costs of an order or transaction.
You can verify these details manually. However, a more reasonable solution would be to rely on software that uses thresholds to filter out invoice data with inaccuracies. Using a tool of this sort will save you time and effort.
2. Unexplained/Unidentified Fees
Invoices containing unexplained fees will shock and irritate clients – they’ll feel taken advantage of. After all, no one wants to pay for charges they don’t remember agreeing to.
That’s why it’s vital to keep your clients in the loop so that they are aware of all charges and fees. Mistakes can happen and that’s why it’s important to have a safety net of sorts that can track invoicing inconsistencies, so that the client pays the fees they expected to pay.
This issue relates closely to the idea of consistent formatting. Make sure that all fees involved in the project or sale are made known from the very start.
3. Slow follow-up/poor tracking
Last but not least, there’s the issue of simply following up with invoices. Failing to keep up with invoice payments can lead to clients forgetting to make payments, and of course, this only hurts your businesses’ cash flow.
With the right data analytics software, you can set thresholds for the turnaround of payments. This allows you to see how long it takes (and should take) for clients to make invoice payments, and lets you see if this is happening unusually fast or slow.
Don’t Let a Small Seed Grow Too Big
The cliché “prevention is better than cure” will save you hours, dollars and energy when it comes to accurate invoice payments. Of course, mistakes will happen on occasion, so it’s also vital to have tools in place that can catch these errors fast.
Data analytics software makes both the “prevention” and the “cure” possible. With GLAnalytics, for example, you can set thresholds (standards) that all your invoices should meet. With those thresholds in place, you set a precedent for what every invoice should look like (consistency). However, you also create a reference point to help you retrace your steps when things go wrong. And since it’s automated, it also means you can eliminate speculation and guesswork when it comes to invoice accuracy.
If you’re interested in learning more about GLAnalytics for your business, get in touch with us for a consultation.