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Billing Best Practices
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computer and printer), so there must be a clear trade-off between the implemen-
tation and capital cost of the system and benefits from reduced accounting staff
labor. These criteria tend to point toward only larger companies that make fre-
quent deliveries to a large number of customers. Smaller firms will not find that
this is a cost-effective practice to install and use.
Cost: Installation time:

4–10 COMPUTERIZE THE SHIPPING LOG

For a company with no computer linkage to the shipping dock, the typical
sequence of events that leads up to the creation of an invoice is that copies of the
packing slip and the initial customer order form are manually delivered to the
accounting department from the shipping dock; then the accounting staff uses
this information to create an invoice. Unfortunately, this manual transfer of infor-
mation can sometimes lead to missing documents, which means that the account-
ing department does not create an invoice and sales are lost. In addition, this sys-
tem can be a slow one—if the shipping department is a long way away from the
accounting department, perhaps in a different city, it may be several days before
the invoice can be created, which increases the time period before a customer will
receive the invoice and pay it. Finally, there is a problem with data entry, because
the accounting staff must manually reenter some or all of the customer informa-
tion before creating an invoice (depending on the amount of data already entered
into the computer system by the order-entry department). Any additional data
entry brings up the risk of incorrect information being entered on an invoice,
which may result in collection problems, especially if the data-entry error related
to an incorrect shipment quantity.
The solution to this problem is to provide for the direct entry of shipping
information by the shipping staff at the shipping location. By doing so, there is no
longer any time delay in issuing invoices, nor is there a risk that the accounting
staff will incorrectly enter shipping information into an invoice. There is still a
risk that the shipping staff will incorrectly enter information, but this is less
likely, since they are the ones who shipped the product and they are most familiar
with shipping quantities and other related information. For this system to func-
tion properly, there must be a computer terminal in the shipping area that is
directly linked to the accounting database. In addition, the shipping staff must be
properly trained in how to enter a shipment into the computer. There should also
be a continuing internal audit review of the accuracy of the data entered at this
location, to ensure that the procedure is continuing to be handled correctly.
Finally, the accounting software should have a data input screen that allows the
shipping staff to enter shipping information. These tend to be minor problems at
most companies, since there is usually a computer terminal already in or near the
shipping area, and most accounting packages are already set up to handle the