The economic crisis is choking off cash flow at many companies, but invoicing problems are hurting cash flow too, according to a new study.
In a survey of more then 100 accountants by accounting software developer Coda, 89 percent of them said that cash flow has become a more important problem for their company in the downturn. Some 47 percent said that invoicing delays are a “definite” or “somewhat” common source of cash flow problems for their company. Twenty-five percent of the respondents estimated that their company has experienced delays of at least $5,000 a month due to invoicing errors. In addition, nearly 17 percent have seen payments greater than $50,000 delayed due to invoicing errors.
“Clearly, in the current climate, collection of invoices is absolutely key,” said Coda CEO Jeremy Roche. “Many people said invoicing delays were constant.”
Getting invoices cleared early and the questions ironed out are an easy way to improve cash flow, he added. Roche (pictured) recommends that companies make sure their billing and collections employees improve the way they interact with customers. “People forget that the interaction and the customer experience is about how you deal with collections,” he said. “Ongoing business can also be obtained by making sure the whole client experience is improved, making sure they’re invoiced on time, accurately, and in a pleasant and polite manner.”
There should be follow-through to find out if a customer isn’t paying a bill because of economic difficulties or if some other issue is getting in the way. “If someone isn’t paying, there may be other reasons, like client satisfaction reasons,” said Roche. “If someone hasn’t paid me, has the quality of my service not been up to scratch?”
The company’s Web-based, on-demand application Coda2Go includes features that allow more interaction between companies and customers, including the ability to go online and query invoices, and plan what payments are due to be made. “It gives them good visibility of what’s coming and allows them to be ready for it,” said Roche.
His own company is readying a spring release of Coda2Go that integrates with Salesforce.com to give salespeople a better view of customer accounts. Coda is also researching with Salesforce the ability to work with Facebook and has begun using wikis and Twitter feeds on its Web site for customer support. Coda2Go is part of the company’s strategy to offer a more economical version of its on-premises software. Coda is owned by the Dutch company Unit 4 Agresso NV. Despite the gloomy economy, London-based Coda posted growth in both revenue and profitability last year, said Roche.