Invoicing errors could kill your business, survey finds…
We recently ran a survey in the US to see whether invoicing errors had a material effect on the cash flow of SMBs. I have to admit, I was sceptical that we would find anything significant – but how wrong I was… As you can see from the survey results, it seems that invoicing errors are sapping businesses of cash just when they need it most. The problem, which we’ve dubbed the ‘Margin of Error’, stems from the common business practice of submitting multiple invoices at once. If a customer finds an error on even one, it will often hold the entire batch for verification. This can take weeks, even months, and have a serious impact on cash flow.
The survey of more than 100 US accountants at small-to-medium-size businesses (SMBs) found that a large percentage of respondents confirmed that invoicing is a common source of cash flow problems, and a significant number estimated that at their companies, improper invoicing delays thousands of dollars of revenue per month. Nearly half said that invoicing delays are to some extent a common source of cash flow problems for their company. A quarter estimated their company has at least $5,000 a month delayed due to invoicing errors, and nearly 17% have seen payments greater than $50,000 delayed due to invoicing errors!
Clearly most respondents were feeling more pressure to invoice properly in the downturn; however, almost 60% said their company wasn’t really looking for ways to improve its invoicing process. Sounds like an error to me! Cash flow is critical at anytime, but right now when SMBs are starved of credit and struggling for business, they should be fighting for every dime. That means making sure their invoicing is faster, clearer and 100% correct, so that credit controllers can start collecting cash earlier and customers have no excuse to withhold payment. When we talk to Salesforce.com users, they generally have accounting systems like Sage or Quickbooks that are not integrated, or barely linked, with their CRM.
That presents two serious risks: – there is a time delay between closing an opportunity and invoicing the client. This can often be a week or more, even when they could legitimately have sent the bill in. So the clock doesn’t start ticking at the customer end until later, delaying the eventual payment day… – there is great potential for mistakes, as data is rekeyed from the CRM to the Accounting system. our survey shows the danger of that. Clearly, CODA 2go offers Salesforce.com users the opportunity to overcome these issues. Built on the same platform as their CRM, it is completely embedded. When an opportunity is closed, one click on the ‘raise an invoice’ button ensures that the process – and the data behind it – moves seamlessly into the accounting application and the process of billing and collecting cash begins. It’s something CODA users have always enjoyed, whatever their systems, since our integration utilities are second to none. Even if CODA 2go users don’t have salesforce, integrating it with their other systems will be made simple due to our integration tools and the services available to make it easy. That approach has always made sense to us. In tough economic times, it’s a no brainer!