Page 79 - Accounting Best Practices

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Billing Best Practices
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4–1 ADD CARRIER ROUTE CODES TO BILLING ADDRESSES
For those organizations that issue large quantities of small-dollar invoices, the
cost of mailing is a substantial portion of the total cost of doing business. For
these organizations, a lower-cost approach to mailing an invoice must be found.
One alternative is to include a carrier route code in the address field for each cus-
tomer. This information is used by the postal service to more easily sort incoming
mail pieces by carrier route. In exchange for this information, the postal service
allows a small reduction in the cost of each item mailed. At the time of this writing,
the difference between the standard price for an automated letter-size mailing and
one that includes the carrier route code is about three cents (for the most recent
rates, go to www.usps.com). This difference is sufficiently large that a billing
manager who processes thousands of invoices per year should certainly consider
it as a potential way to save costs.
To implement this best practice, one must obtain the route codes from the
postal service on either a monthly or bimonthly basis. They are available on tape,
CD-ROM, cartridge, or hard copy. The company’s customer address files must be
updated with the latest carrier route information, as specified in the postal ser-
vice’s Domestic Mail Manual. To determine the exact format of the file, one can
download a sample file from the postal service’s Web site. These steps obviously
require some effort on a continuing basis, so one must carefully determine the
cost-benefit associated with this best practice before implementing it. Realisti-
cally, only a very large mailing operation will save money through this approach.

Cost: Installation time:

4–2 HAVE DELIVERY PERSON DELIVER THE INVOICE

A company may not have the wherewithal to create invoices at the point of delivery,
as described later in the “Have Delivery Person Create the Invoice” section. How-
ever, it may still be possible to have the delivery person hand-carry the invoice at
the time of delivery to the customer’s accounts payable department. By doing so,
a company can compress the mail time that would otherwise be required to get an
invoice to a customer and ensure that the invoice is delivered directly into the
hands of the person who is responsible for paying it. Thus, direct delivery of an
invoice carries with it the advantages of reducing the total transaction time, while
also ensuring that the invoice is not lost in transit.
However, having the delivery person deliver the invoice only works in a small
number of situations. The key element is that a company must make deliveries
with its own personnel; if not, a third-party delivery person will not hand-carry an
invoice, which makes this best practice impossible to implement. Also, there must be
a close linkage between the accounting department and the shipping dock, so that
invoices are prepared slightly in advance of shipment and sent to the delivery person