The Fast Close, Part 10 (#25)
/In this episode, we cover improvements to the billing process, and make final comments about the fast close. Key points discussed concerning billing are noted below.
The Closing Issues with Billing
I’ve saved billing to be the last item I cover in these discussions on the fast close, because most people tend to leave it for last. When you start a fast close project, billing is not usually considered a problem area, because it doesn’t really take that long to complete. Instead, people like to focus their attention on the really massive issues, like improving inventory accuracy. But once they get past all of those other problems, billing is still waiting there, totally unimproved and hogging a large chunk of the closing day.
The main issue with billing is that you really can’t eliminate it entirely on closing day. More than likely, there’s been a fair amount of shipping right through the end of the preceding day, and that’s just going to take some time to process. However, there are some ways to improve the situation.
Issue Invoices Early
First, issue invoices as early as possible. This means completely flushing out every other invoice related to shipments made earlier in the month. There’s absolutely no excuse for waiting until closing day to complete invoices that could have been handled a few days before.
Also, issuing invoices as early as possible also means having someone stay late on the last day of the close in order to create invoices based on any shipping documents sent in by the shipping department up to that point.
First thing the next morning, send someone down to the shipping dock to verify everything that was shipped the day before, and to bring back any remaining shipping documents. Get someone working on these last invoices as soon as possible.
Put Resources on Invoice Issuance
However, even being organized like this is not enough. There may be such a volume of invoices to be created that it still takes a bunch of hours. If so, you should assign practically everyone to do invoicing during the morning of the close. In addition, give each one of them their own laser printer, so they can more efficiently create invoices. Not having them walk to a central printer can save a surprising amount of time.
Do Not Retype Information
Another time-saving trick is to not retype a lot of information from supporting documentation onto an invoice. Instead, enter on the invoice something like, “See attached” or “As per the attachment,” and then staple the supporting documentation to the invoice. Or, if you’re copying from an electronic document, try to cut and past the information into the invoice, rather than manually retyping it.
Use Special Invoice Templates
Also, we’ve all run across those painful customers who want invoices issued to them in a very specific format – or else they’ll reject the invoice. The slow and painful approach is to manually create exactly what they want, no matter how much time it takes. However, if the customer is going to be around for a while, consider creating a special customer invoice template for them, so that the special formatting becomes a routine billing issue.
Additional Comments
In addition, don’t keep waiting to create an invoice if there’s a chance that its contents may change in the near future. If you wait around for more accurate information, it may not arrive for weeks. A better alternative is to at least create the invoice, so the revenue is booked, and then modify it after the fact – if that’s even necessary.
And finally, if you send out month-end statements, don’t do it right in the middle of the close. That’s something that can easily wait a day or two, so just schedule it for some other time.
So, some final comments on the fast close. Your primary goal is to shift work out of the closing day, so the most effective change you can make is to shift closing work forward into the preceding month. Another comment is that the fast close does not require much money – you don’t need fancy accounting or workflow management software. In fact, you don’t really even need a consultant. But if you do hire a consultant, get one with a good industrial engineering or process analysis background. That kind of skill is useful, because the fast close is entirely about process improvement, and not at all about accounting.