The second thing that upsets me is how little recognition and attention this function receives from senior management at any time. It is like as if they are in denial and if they don’t know about it then it doesn’t exist!
The third thing is that in my estimation sending out wrong invoices shows a complete lack of respect for your customer. Expecting them to check your shoddy paperwork and let you know if there is anything wrong. As a business you take quality very seriously. Why does this not extend to the quality of the invoices sent to customers?
When you look at it, it is very simple there are only two variables on an invoice the quantity and the price. Pricing is simply a communications exercise between the Sales person, the customer and the person who updates your price files. It is up to you to fix every query as quickly as possible and more than that investigate thoroughly what happened, what were the steps that led to the miscommunication? What steps should have been taken to avoid the error? What needs to change to make sure this never happens again?
If you have overcharged a customer or a number of customers there are a number of implications:
1 Your customers are annoyed
2 Your sales analysis is overstated
3 Your reported profits are overstated
4 You have to spend time raising and analyzing Credit Notes
5 If you pay commission on sales you have overpaid the salesperson
So on the last point you are in fact rewarding sales staff who overcharge their customers by paying them higher commission – Is that a good idea?
If the quantity is wrong that will have implications from a stock take perspective, and will eventually undermine the integrity of your stock system and your reordering levels. If the system stock bears little resemblance to reality you are leaving yourself open to abuse of your stocks and even possible theft.
Take time out after reading this article to come up with a system to deal with your queries, not simply putting through a credit note and getting it approved at the appropriate level, but going to the next stage of understanding what happened, and then going to the next stage to make sure it doesn’t happen again.
The results will be
More confident and focused Credit Controllers
More accurate reporting
Improved internal communications
It is worth the effort.