Page 90 - Accounting Best Practices

c04.qxd 7/31/03 1:37 PM Page 79
79
4–11 Track Exceptions between the Shipping Log and Invoice Register
direct entry of shipping information; some even do so automatically as soon as
the shipping staff creates a bill of lading or packing slip through the computer
system. In short, unless there are very antiquated systems on hand or a poorly
trained or unreliable shipping staff, it is not normally a very difficult issue to have
the shipping employees directly enter shipping information into the accounting
system, which can then be used to immediately create and issue invoices.
Cost: Installation time:

4–11 TRACK EXCEPTIONS BETWEEN THE SHIPPING LOG
AND INVOICE REGISTER

If a company relies on the manual transfer of shipping information from the ship-
ping dock to the accounting department, it is likely that some shipments are never
billed, resulting in a permanent loss of revenue. This situation arises because
information can be lost on its way from the shipping dock; it can be mixed with
other paperwork, put into the wrong bin, given to the wrong person, or any num-
ber of other variations. In even the best-run companies, there is a strong chance
that, from time to time, a shipment will not be invoiced. If the shipment in ques-
tion is a high-dollar one, the cost of the missing transaction can be considerable
and may make it worthwhile to take steps to remedy the situation.
Fortunately, the solution is not a very expensive one. To avoid any missing
invoices, one must continually compare the shipping log maintained by the
shipping department with the invoice register that is maintained by the account-
ing department. Any shipment that is listed on the shipping log, but that has not
been invoiced, must be investigated at once. There may be good reasons for a
shipment that is not invoiced, such as the delivery of a free sample, but the
investigation must still be completed in order to ensure that there are no prob-
lems. If a problem is uncovered, it is not enough to just issue the missing
invoice. One must also determine the reason why the paperwork for the ship-
ment never reached the accounting department and fix the underlying problem.
Only by taking this extra step can a company keep from having a continual
problem with its invoicing. Any company that uses a manual transfer of infor-
mation between these two departments should always track exceptions between
the shipping log and invoice register.
It is also possible to avoid the entire problem by having the shipping depart-
ment record all shipments directly into the accounting database, as described in
the preceding section, ‘‘Computerize the Shipping Log.” By using this approach,
there is no manual transfer of information, so there is no exception tracking to
perform. It is also possible to have the shipping department not only enter ship-
ments into the computer, but also print out invoices in the shipping department
for delivery with the shipments. This approach was also described earlier, in the
section ‘‘Delivery Person Creates the Invoice.” However, if the shipping area