Page 87 - Accounting Best Practices

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Billing Best Practices
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The main problem with creating automatic error-checking is that it can be a
significant programming project. There may be a dozen different error-checking
protocols linked to the invoice data-entry screen, and each one is a separate pro-
gramming project. Also, if a company purchased its software from a third party, it
is common for the company to periodically install software updates issued by the
supplier, which would wipe out any programming changes made in the interim.
Accordingly, it is best to apply these error-checking routines only to custom-
programmed accounting systems. An alternative is to use error-checking as a cri-
terion for the purchase of new packaged software, if a company is in the market
for a new accounting system. In either of these two cases, having automatic error-
checking is a worthy addition to an accounting system.

Cost: Installation time:

4–9 HAVE DELIVERY PERSON CREATE THE INVOICE

Many companies have difficulty with their customers when the company bills for
the quantity that it believes it shipped to the customer, but the customer argues
that it received a different quantity and only pays for the amount it believes it has
received. This problem results in the invoicing staff having to issue credits after
the fact, in order to reconcile the amount of cash received from customers to the
amounts that were billed to them. The amount of work required in these cases to
match the amounts billed to the amounts paid is usually greatly in excess of the
dollar amounts involved and has a profound impact on the efficiency of the
billing staff.
New technology makes it possible for some companies to completely bypass
this problem. If a company has its own delivery staff, it can equip them with
portable computers and printers and have them issue invoices at the point of
receipt, using the quantities counted by the customer as the appropriate amount to
invoice. A flowchart of the procedure is shown in Exhibit 4.2. To begin, the ship-
ping staff determines the amount to be shipped to a customer and enters this
amount into the main accounting database. The amount in a specific truckload is
downloaded into the portable computer of the delivery person, who then brings
the truckload of goods to the customer. The customer counts the amount
received. The delivery person calls up the amount of the delivery on the screen of
the portable computer, enters the quantities that the customer agrees has been
received, and prints out and delivers an invoice (which may be on a diskette if the
customer has a compatible computer system that can receive invoice data in this
fashion). The delivery person then returns to the company and uploads all invoic-
ing information from the portable computer to the main accounting database,
which records the invoices and notes any variances between the amounts shipped
and the amounts received by customers (which will be investigated if the vari-
ances are significant). It is also possible to upload information at the customer