Billing Best Practices: What are your 3 tips for ensuring error-free billing?

Often the billing system is an industry-specific package which integrates into general purpose accounting software. To ensure accuracy, the integration needs to be planned, checked and monitored.

1. A major source of error is the tax calculation. If the two systems both calculate the tax, then penny differences can emerge. The customer pays based on the bill, so if the accounting system has a different amount, these small differences can accumulate, cluttering up the statement and leading to customer and staff frustration. Ensure that your billing system does all the calculations and passes the result to accounting.

2. Focus on the whole bill, not just the dollar amounts. Customers want their address (billing and shipping), discount rates, tax status, payment terms and purchase order numbers to be accurate as well.

3. Do a volume test. Typically, billing systems are tested with a single, simple invoice, often repeated over and over again. You should test your system with a month's worth of "real" (i.e. historic) transactions, to be sure that it can handle the load.

Billing/invoicing when you own a home business can present its own challenges -- especially if you are putting together invoices using Word or PayPal, rather than specialized accounting software. Some things that can be done to streamline this process include:

1. Practice consistency: Create a standard invoice template using your application of choice so that all of your invoices look the same (and more professional). Also, practice consistency in naming your invoice files, and with your invoice numbering, so that it is easy to reference them as needed. PayPal allows you to save templates for invoices, and this can be quite helpful if you have recurring invoices. Also, practice consistency in when you send the invoices. Create a timetable, whether that is weekly, bi-weekly or monthly, for sending out invoices.

2. Double check the invoices: Before sending out your invoices, ensure that the information on them is correct. Check customer information and your information, as well as verifying the items and dollar amounts involved.

3. Keep records of agreements: Records of payment agreements should be kept so that you can refer to them as needed when preparing invoices. Also, keep a record of the work done, so that you can include dates on your invoice as needed. Keeping good records can help you back up your invoices if your home business clients have questions about what you have done.

Error-free billing is all about systems and let’s face it, accounting software is so cheap these days there's no longer any excuse (even for micro-businesses) not to utilise a good package!

1. Use as many standard paragraphs, comments, descriptions as you can. This not only saves time but greatly reduces the opportunity for mistakes as “free-typing” can be reduced to the absolute minimum.

2. Automate with links from timesheets, your inventory system, standard prices and customer database which again saves time and reduces the possibility of getting it wrong.

3. Get the salesperson or fee-earner to raise the bill or at least review the bill before it’s sent out.

An incorrect bill is catastrophic to customer confidence!

Having a good tool and knowing its bells and whistles helps a great deal. That means also you have to do your homework and do some proper testing. Storing your billing data safely is yet another obligation to keep your customers happy.

There are two extremely useful reports that should be run and reviewed every month. First is the aging report, which provides the current status of each customer's invoices and payments in days. The second is the variance report, which offers a window into possible invoicing errors, both receivable and payable.

Together, let's put the fun back into work!
Belldon Colme
belldoncolme@gmail.com

I agree with Miranda.. good invoicing tool will help. Here's a coupon to 90 days Ultimate version: http://fetchflow.com/coupon.aspx