Let's Confront Reality --Dickeson
June 2005
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"The buck stops here," as President Harry Truman put it. Responsibility starts at the top —with the Chief Executive Officer of every printing company—every company, in fact. The CEO sets the policy for the company, sometimes consciously, most often unconsciously, by his or her demands and actions.
Take the question of when a job can be billed. Is it with the first product delivery, mailing, or shipping? Or is it when the final delivery or shipment is made? It's up to the CEO to say, isn't it? What's the policy in your shop? Is it different for different customers? Do you even have an articulated policy on when a job can be billed? Is it important?
It's very important. The day when a job is actually billed becomes day one—the birthday of an account receivable. From that point onward we count the candles on the birthday cake—the days until the customer pays the bill. If we're giving a discount for quick-pay, that birthday starts the timing of the discount period, doesn't it? If we've set limits on credit extension, until we bill we don't know how much credit we've extended any particular customer until we bill the job. If we're financing receivables, that birthday is when the money's available.
The CEO, in order to do his job properly, needs a metric of accountability—fancy name for a simple report. The CEO must have a report that tells him/her how many days or hours elapsed from job eligibility for billing—from policy date—until the date or time the invoice actually issued. That's policy execution time. Call that the "pre-invoice" time period. Is that time important? Only if we're dealing with a "for profit" business.
How much time is acceptable for that pre-invoice period? In my view, there should be only a matter of a day—at most!
Take Accountability
Who's accountable for that pre-invoice time period? Is it a customer service rep, a sales rep, an accountant, or maybe even the CEO? Somebody, some person, or persons are accountable for any time lag between eligibility and invoice issuance for each and every job. Who is accountable for policy execution? The report must tell us.
Our report must name the eligible account, the person accountable, and the time that has expired for the billing (days or hours to bill). Group the report by responsible person and show the totals of days (or hours) to invoice. Competition among the billers for the lowest "days (or hours) to billing" will focus process correction and will benefit the company.
Take the question of when a job can be billed. Is it with the first product delivery, mailing, or shipping? Or is it when the final delivery or shipment is made? It's up to the CEO to say, isn't it? What's the policy in your shop? Is it different for different customers? Do you even have an articulated policy on when a job can be billed? Is it important?
It's very important. The day when a job is actually billed becomes day one—the birthday of an account receivable. From that point onward we count the candles on the birthday cake—the days until the customer pays the bill. If we're giving a discount for quick-pay, that birthday starts the timing of the discount period, doesn't it? If we've set limits on credit extension, until we bill we don't know how much credit we've extended any particular customer until we bill the job. If we're financing receivables, that birthday is when the money's available.
The CEO, in order to do his job properly, needs a metric of accountability—fancy name for a simple report. The CEO must have a report that tells him/her how many days or hours elapsed from job eligibility for billing—from policy date—until the date or time the invoice actually issued. That's policy execution time. Call that the "pre-invoice" time period. Is that time important? Only if we're dealing with a "for profit" business.
How much time is acceptable for that pre-invoice period? In my view, there should be only a matter of a day—at most!
Take Accountability
Who's accountable for that pre-invoice time period? Is it a customer service rep, a sales rep, an accountant, or maybe even the CEO? Somebody, some person, or persons are accountable for any time lag between eligibility and invoice issuance for each and every job. Who is accountable for policy execution? The report must tell us.
Our report must name the eligible account, the person accountable, and the time that has expired for the billing (days or hours to bill). Group the report by responsible person and show the totals of days (or hours) to invoice. Competition among the billers for the lowest "days (or hours) to billing" will focus process correction and will benefit the company.
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