Once again, this sounds simple, common knowledge every business owner or manager should know, right?  Unfortunately knowing the rules and following them are two completely different things. How can this be solved? Simple, and it is, employ a method which corrects the commonly overlooked or unmanageable targets in a companies accounts receivables. Invoice generation, invoice delivery, ease of payment for your customers, cash application, open invoice management, and collections. This is the purpose of an EIPP system, Electronic Invoice Payment and Presentment. Integrated with a company’s order and accounting systems along with the internet as a transfer method, invoicing and payments can flow smoothly, increasing cash flow.

First we must generate the invoice. This may be done manually or using order and invoice software. Amounts, items, fees and payment due dates are generated to match contracts provided and an invoice is born.  This invoice then must be delivered to the customer. Mailed invoices have several inefficiencies; these must be reduced to streamline cash flow. Several costs, realized or unrealized are inherit to paper invoicing. Printing, envelopes, postage, time lag for actual delivery, and payment processing once received, all diminish profit, in some cases substantially. A twenty dollar invoice may cost up to five dollars to process and deliver, that cost doubles if there is a second mailing. With electronic delivery, material costs are eliminated, postage is eliminated and there is no time lag, the invoice can be directly emailed to the individual in charge of processing. Plus we are reducing the nasty CO2 emissions.  Second deliveries or follow ups are easily duplicated by regeneration of the electronic document. This is technology at work from the beginning steps; creation to delivery in 60 seconds, by following this first step through the entire process, payments can be just as efficient.

In my next post I will review payment options, which ones work, which ones don’t and most importantly, what works to get your company paid the fastest. Remember that is the goal of accounts receivable, get paid faster.