Late Invoices, Lost Money --Dickeson
What is it that the customer of commercial printing is looking for when a job is ordered? Is it quality, count or timeliness of delivery? Or all three? Which is most important? Does it make a difference? Depends on the job and client, doesn't it? All three must be met if a job is to satisfy a customer's needs, but often a little extra effort on quality or timeliness is needed.
Offhand, you'd think that a precise count would be the easiest to satisfy. It seldom is, unless, of course, the units of the job must be sequentially numbered like checks or forms. We still have to make an "overs or unders" allowance in our contracts. We can't deliver a precise count for an order. And, thereby hangs a tale...and most commercial printing companies!
We can't issue the invoice unless we have some kind of a count from the bindery or finishing. We can't collect cash for the job unless a proper invoice has been sent. Sometimes this is several days after the job has shipped.
Why Don't We Do That?
Perhaps it's time we put a stop to this practice. Why shouldn't we invoice the customer for the exact count ordered? Why shouldn't the invoice issue the moment the job ships? We simply specify in the contract that we will deliver the quantity ordered for the job, plus or minus a given percentage for count errors. We'd win some, lose some.
Most of all we wouldn't be waiting around to date and send an invoice. We'd get the cash in the drawer several days faster, wouldn't we? And, why not? You tell me.
"We're waiting for the final count or the job jacket (or ticket)," is the usual excuse given by the accountants for delaying an invoice. But, we've just solved that count problem. Now we're looking for any other reason why accountants don't have the invoicing information they need. Is the job jacket lost? Laying on someone's desk awaiting action? It happens. Quite regularly in some companies, I'm sorry to say. That is something for administrative discipline.
But, if you're using electronic job ticketing, how can this ever happen—unless you lose your computer and its server? The only possibility then is that someone may fail to input customer changes in the original order.
We've now solved two problems: Count and Lost Job Tickets. What else? Customer changes, again. These are changes in the original order that may, or may not, modify the invoice. Either you're using an electronic job jacket system or you aren't. If you aren't, it's easy for someone in customer service, or somewhere else, to have forgotten to note the change or to just be "sitting" on the change information.
There's one thing about customer changes that will affect the final invoice total. Either the changes have been accepted, and a dollar value placed on the change, or there hasn't been. If there's no documentation of the change, and customer acceptance of the charge, then it should not be invoiced. In this day of e-mailing I can't think of one good reason why there should not be, at the very least, an e-mail record of change orders. Can you? If there is an e-mail documentation, then it must be saved in a file for the invoice. If you're using an electronic job ticket, then the e-mail exchange must be saved in that ticket file.
Three problems commonly cited for delayed invoicing have now been recognized and solutions proposed: Count, Lost Tickets and Change Order documentation. What else? The original order itself is incomplete or ambiguous? Come on! How in blazes did we ever process the order if that were true? And, did we wait until this last moment before invoicing to find that out?
Sometimes management has ruled that the salesperson on the account must review and approve the invoice before it's sent. Why should this be? Either the salesperson has included everything essential for the final invoice in the sales order or she/he hasn't. What kind of an excuse is this?
What I'm doing here is trying to identify any reasons for delay between finishing a job and sending the customer a bill for the work. Is it a problem? Is it serious? You bet your bippy it is!
Anything. . .anything at all that delays collection of cash is VERY serious for the continued viability of a printing company. When I hear that the average delay for printers in getting out invoices is 14 days, I'm ready to vomit. That is simply unacceptable! It's longer than a 10-day, quick-pay, discount period.
Your financial controller knows this. He or she is not waiting for the wine of a job to age. Get him or her the information needed to get that e-mail copy of the invoice dated, on the Internet, and in the hands of the customer. Demand that a bill must issue to a customer by a date within 24 hours of shipment. Issue an order that doesn't allow "accrual" of a sale until the invoice is collected!
The Path Has Been Set
But before doing anything that disrupts your current practice, follow the path I've just laid out. Get the facts. Find out if there are any reasons beyond the five I've just named: Count, Lost Tickets, Customer Changes, Incomplete Order Details and Salesperson Review. If there are—it's beyond me to think of any at this moment—then cut 'em down, one-by-one! Get rid of the excuses.
Look at it from the customer's side for a moment. The customer wants to know, right away, what's owed for a job. (Do you like waiting for the tab in a restaurant?) If you delay a week or more in getting an invoice out, what does the customer think about your need for cash...your job alertness?
How can we afford a new press or binder that will speed up production of jobs by a few hours when it takes days or weeks just to invoice the job? As printers we're more concerned with sales and production, aren't we? It's high time we began to run printing like a business!
About the Author
Roger Dickeson is a printing consultant located in Pasadena, CA. He can be reached at rogervd@sbcglobal.net. A PDF copy of his recent book Monday Morning Manager is available without charge by e-mail request.
