Accounting Best Practices, Fifth Edition

Total Impact of Best Practices on the Billing Function

This section describes a set of best practices that, when integrated into the billings function, results in significant efficiency improvements. The best practices presented here are a subset of the complete list presented earlier in this chapter, in Exhibit 4.1. This listing, as diagrammed in Exhibit 4.3, eliminates several best practices that are mutually exclusive. For example, if a company uses a computerized shipping log to create invoices, there is no need to use another best practice, such as tracking variances between invoices created and the paper-based shipping log. When these types of conflicts arise, only the most advanced best practice is assumed to be used. As a result, the best practices shown in Exhibit 4.3 note that a company should always directly link its shipping dock with the accounting database by having all shipments automatically invoiced as soon as the shipping staff puts a delivery on an outbound truck. The printed invoice should use a minimum number of copies, avoiding several downstream steps to file them. The invoicing function should also avoid the use of month-end statements. Finally, a company has a variety of invoice-delivery options to choose from, ranging from EDI transmissions to point-of-delivery invoicing, or even the complete elimination of invoices by using direct cash withdrawals from customer bank accounts. The exact invoicing method or combination of methods chosen will depend upon ...