Many businesses have sophisticated accounting systems and have moved to paperless ordering and invoicing processes but do not send monthly statements to their customers.Companies who have strict ”payment on statement policies” will therefore delay payments to their suppliers.
Accountants like to process “payables” to suppliers for a whole month at the time, so it makes sense to do the “monthly statement run” once all invoices have been raised and all payments received have been processed. Accountants who have to collect suppliers’ invoices in “dribs and drabs” will find this more cumbersome and are likely to delay payment.
Before sending out statements, it is important to review them for any possible cash application errors i.e. payments on account which should be applied against invoices, credit notes which should be applied against invoices, duplicate invoices. Statements which contain up to date account information can be processed swiftly, statements with out of date information will be put aside or end up in the bin.
Furthermore monthly statements could “double” as overdue reminder letters if sent out with a large “account overdue” stamp.
Statements could show company messages at no extra cost for example “We are moving…”, “Our new website is…”, “ winner of the xxx…” , “Special offer this month..”, “Merry Christmas” …
Effective statements at a glance
Sending out monthly statements is a straight-forward process. Most accounting systems contain templates which can be customised:
- Send them once all invoices have been raised and all cash receipts have been processed
- Review them thoroughly before sending them out
- Send them correctly addressed to the accounts payables department
- If sending by email, check email addresses regularly
- Clearly display invoice details, amounts due and due date
- Provide “ REMIT TO:” details for payment by Cheque and BACS
- Use a red “ACCOUNT OVERDUE” stamp to highlight overdue accounts
- Use statements for company messages
Great things are done by a series of small things brought together.
Vincent van Gogh
Click this link for further credit manage ment tips: payontime.co.uk