This ad will close in

Management Smarts

Tips and trends for growing your business

In the ongoing battle to get paid on time, two of your most effective weapons are well-designed invoices and billing statements. Start by understanding the document's purpose, advises Frank Uhlman, a collections expert at the Commercial Law League of America.

"The invoice describes a particular purchase," Uhlman says. "Statements, or bills, are usually sent monthly and list the invoice numbers and dollar amounts of purchases and payments made during the billing period."

Clarity is a critical element of both documents. "The invoice should contain enough information to deflect any possibility of a delayed payment because of confusion as to what the bill is for," Uhlman says.

In addition to your own internal coding (such as the customer account number, salesperson and so on), the invoice should include a complete, clear description of what was purchased, avoiding unclear abbreviations. Specify quantities purchased, unit prices and totals; show the customer's purchase order or other reference information to identify the transaction; and clearly indicate the terms so the customer knows when payment is due and whether a discount for early payment is offered.

The statement should summarize the transactions made during the billing period. Keep related information together, and use graphics to call attention to important information. Include a duplicate copy or perforated piece the customer can return to help you apply payment properly.

Uhlman says invoices and statements should be designed from the buyer's viewpoint, not the seller's. You may want to select a group of customers to review your documents, and use that input as a basis for improvement.

Page 1 2 3 Next »

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the February 1996 print edition of Entrepreneur with the headline: Management Smarts.

Loading the player ...

Tim Ferriss on Mastering Any Skill

Ads by Google

0 Comments. Post Yours.