One of the most time consuming elements of any facility manager’s job is the management of invoices. Of course, there are two sides to billing: Accounts Payable – bills you must pay – and Accounts Receivable – bills you are being paid for. As a provider of services to clients, as well as a vendor management company, we have insight here at ACACIA into ways to streamline both Accounts Payable and Receivable practices. As a vendor creating and issuing invoices, following our four best practices will help ensure accuracy in your billing process.
Make sure to download our free invoice template!
1) Pay Attention to Details
The key to a great invoice is all in the details. When creating your invoice, make sure it includes the following components:
- A unique invoice number
- The invoice issue date
- The invoice due date
- The total amount due
- Purchase Order reference number (if applicable)
- A description of the work being billed for
- Date of Service
Our Finance department’s first step in reviewing received invoices is to highlight each of these items in order to decide the priority level. It is important to be extremely specific when creating an invoice in order to ensure that the client knows exactly what they are being billed for, when it is due, and a unique number by which to identify and file the invoice. Finally, if the invoice is tied to a Purchase Order for services, make sure to indicate that PO number.
These details make each invoice unique, easy to understand, and ensures an accurate workflow of how and when bills must be paid. A great way to keep these details consistent is to use a template, making your invoice easily recognizable and managed by the recipient.
2) Be Timely
When sending an invoice to a client, it is imperative to make sure that its issue date is consistent with the terms of the contract. For example, a contract might indicate that the invoice must be sent on the 15th of every month, at which point the net 30 due date is calculated from.
Additionally, it is best to send an invoice as close to when the work was completed as possible, which ensures the services are fresh in everyone’s mind and the invoice will take priority. Waiting to invoice will not only delay payment, but create confusion. Remember that Accounts Payable departments could be managing dozens or even hundreds of invoices a day, so staying consistent and timely in your billing practices helps ensure your communication lines stay open.
3) Understand the Approval Process
The point person for who handles the payment of invoices at a particular company can vary greatly. Often, there is an Accounts Payable department that manages all invoices company-wide. Alternatively, individual property managers may handle their own invoices. As a vendor, you only have an outsider’s view of your customer’s internal structure, so it is important to request this information. Becoming as educated as possible about the way your client approves and submits payments will help you streamline communications, get the invoice in the right hands, and eliminate any confusion or possibility of late or missed payments.
4) Stay Organized
As we mentioned, Finance Departments can get swamped with incoming and outgoing invoices. It is important to over-deliver on details and record keeping. Organize invoices by their unique invoice number, company, and date, and keep both hard and electronic versions for your records. Remember that once an invoice is paid, there may still be questions or open issues, so keeping your records and invoices organized is key to the continued efficiency of your billing department.
What other best practices do your Accounts Payable or Receivable employ? Let us know in the comments!
