By: Rachel Murphy – Bayshore Solutions Accounting Team
At Bayshore Solutions, we take pride in viewing our customers as partners. One of our goals is to ensure a positive customer experience not only from a front-end aspect, but also from our back-office practices, such as invoicing and payables.
I’d like to share some best practices that may not only help your relationship with your external customers, but may help to enhance your practices and services to your internal customers and contribute positively to your bottom line.
1. Most billing discrepancies can be resolved quickly through communication. Often times the operations departments negotiate the terms of a sale and this information may not be relayed correctly to the back office staff. By simply reaching out to your vendors and requesting a current statement of your account you can quickly review the invoices for billing accuracy and ensure payments were applied properly. If you find a discrepancy, reach out to the company to resolve. It is better to be proactive on a situation rather than getting that dreaded “past due” notice, especially when it may be due to an oversight.
2. Remittance Information is extremely important when sending a payment. It helps to ensure the payment is applied to your account correctly. This may seem like an obvious step, but companies often will forget to include an invoice or account number when making a payment which can make it difficult for the receiving department to apply the payment appropriately. Leaving it up to the receiving company to “guess” may result in misapplied payments and a potential future frustration for both sides. This is not just a best practice for paper payments, it is also important that electronic payments include remittance information as well.
3. Electronic payments- Checks have become an expensive form of tender – issuing payments by check can cost your company on average $7.78. This cost includes employee time, check stock, envelopes, mailing and reconciling the payments. You can reduce costs for your company and have a better understanding of your cash flow by processing payments electronically via ACH (Automated Clearing House) when possible.
4. Open Credits- You should periodically request and review statements from vendors to find open credits on your account that you may not be aware of. This simple step could help save your company money. These credits could be attributed to duplicate or misapplied payments, returned goods, or billing adjustments. Typically, it is not a top priority for vendors to notify customers of open credits on their accounts.
5. Credit Score- Did you know aging invoices with a vendor could have a direct impact on your company’s credit score? As with your personal finances, a company’s credit score is an extremely important tool for measurement. It can be used in negotiating vendor terms to help your company’s working capital and it can be used to determine whether or not your company is a viable customer. Also, having a good credit score is key to obtaining funding necessary for your growing company.
6. Updating Contact Information- How many times have you updated your vendors when the contact employee has changed on their account? If your vendor has outdated information you may not receive important notices about your account.
A simple way to avoid updating all of your vendors, is to create a generic email inbox or distribution list that multiple associates have access to. For example, email@example.com rather than firstname.lastname@example.org. This way the vendor only needs to know the general email box and you can manage all of your updates internally.
These are just a few simple suggestions to help strengthen your company’s financial success. Bayshore Solutions strives to maintain a “world-class” financial department and provide outstanding customer service to our customers and purveyors. Part of that goal is ensuring our customers have more time to spend on growing their business rather than dealing with administrative issues.
If you ever have any questions about your account, or would like more information about how Bayshore Solutions can partner with you in the future, please contact us via our website or at email@example.com or firstname.lastname@example.org