Standard Procedures in Billing to Simplify Collection

Many business functions can significantly benefit from standard practices and procedures. One such function that can definitely benefit is billing.
Billing should not be a hodge-podge of activities performed as an afterthought as part of your business functions. Billing is one of the most important parts of your business, and you need to ensure you have standard procedures you follow rigorously.

Rigorous procedures are important in keeping the money owed to you flowing into your business. One major factor involving overdue payments is miscommunication and lack of proper paperwork. In some cases, you may not have even actually sent a bill to your customer while you think you have. As a result, you’re expecting payment on a bill the customer never received.

Not long ago, I had a plumber do work in my house. He left and told me his wife, who ran his business, would send us the bill. We waited for the bill and it finally arrived about three months after the plumber had performed his labor.

On occasion, I’d think about the plumber and how I’d not received the bill yet, but I wasn’t overly concerned. I had at least a hundred other things on my mind. A bill that hadn’t even been sent to me wasn’t one of them. When the bill finally did arrive, I paid it right away. I felt awful for that poor plumber who’d done the work so many weeks back and had not been paid.

The same thing can happen in any business if you don’t have standardized procedures you follow for billing. A miscommunication can easily occur, and you can think a customer has become an overdue debtor when in fact they’ve never even received a bill from you.

One of the first things a reputable collection agency will do as their client is gather as much information about the facts of the debt as possible. The collection agency may even find that the customer was never billed.

Now, because you didn’t have standard procedures for billing, you didn’t bill the customer, you turned over the debt to a collection agency, and you now need to pay the agency for their services. You could’ve easily resolved this issue by following a set of robust practices and procedures.

Another scenario might have you billing the customer, but the bill is in error. All companies make mistakes. I recently received something from a mail order company that was in no way related to the item I ordered for them. These mistakes happen all the time – and a lot more often if you don’t follow standard processes.

Following these processes is even more important in billing as the potentially lost income is the life blood of your company. You don’t want to be sending customers invoices for services and products they’ve never received. These customers are as likely to ignore these errant invoices as contact you about them. Then again, you may need to resort to sending the bill over to a collection agency only to find you made the error and are now paying an agency to solve these issues for you.

Following standard billing procedures can save you a lot of headache and problems. Standard billing procedures will help you assure the delinquent accounts you send collection agency are truly delinquent and not errors on your part.