What do your customers feel when they receive your invoice? Do you make the process of getting paid as painless for them and easy for you as possible?
I have discussed in the past how important it is to be centered on customers and the processes we use to reflect that. (If you want a quick review you can check out me previous post focusing on this very topic; the importance of customer-centric processes.)
Since everything we do is a process, I’ve decided to take this time to focus on invoicing.
Do you ever get confused by invoices? It doesn’t have to be a legal or medical invoice, it can even be from a phone company or internet provider. Each company has their own format for providing information on the invoices they send out. It seems rare to find any two that look the same.
I remember a time that I spent my weekend helping clients with their accounts payable. I entered a variety of invoices, probably totaling 25 in all, and I noticed that each format was unique.
It seems that most invoicing processes are designed by some accounting type or IT pro. In fact, I noticed that most of the invoices I was inputting were not very clear on what the invoice was actually for. Now for this task I found that all I needed was the invoice date, invoice number, the items purchased, the total due, and the date it needed to be paid. I found out pretty quickly that none of the 25 invoices made it easy to find the things I needed. I also noticed that not one thanked the company for their business. None of these vendors were being customer-centric.
Sometimes we have to step back and look at what we are sending out to our customers. We need to see it as a customer would, with their perspective in mind. In a separate situation I found myself working with a law firm. We were discussing their billing process and the physical invoice. Since I’m usually a process guy, I was looking at the cash flow perspective because we were shooting for a 4-day improvement to add approximately $100K of cash flow.
From there we moved on to the mindset of the customer and we found that their invoices were customer friendly. There was a long tedious invoicing process that required multiple steps and most invoices were several pages long. When we stepped back to see how we could make the invoices more customer-centric we found that their customers – like me with my startup accounts payable invoices- just wanted the invoice date, invoice number, what was purchased, total of the amount due and when it needed to be paid by. Of course a “thank you” would be nice too.
Because of this we revised the law firm’s billing to completely streamline the process. The invoices are much cleaner–and now they are completed within seven days. Cash flow is estimated to increase by approximately $200,000, and as an added bonus they are now thanking the client for their business.
All it took was changing perspective and putting the focus on the customer’s needs! Is there anything you can adjust to help your invoicing be more customer-centric?