Hitting the Books --Dickeson
Maybe I've just been too hard on those printers with an average of 50 days outstanding receivables by saying they were buying sales by extending credit. It's possible I just don't understand the problem. Okay. Let's get back to some basics.
Then we'll start the cycle over. We'll study again, plan again, execute again, test once more and keep doing that until we accomplish our objective.
What's our objective, you say? Thirty-five days? Forty days? Make it something reasonable and achievable. Remember there's always a little hooker in the path—getting the invoice out promptly! Never forget that when you're counting days or hours. Achieve the objective and you can always set another.
Get Executives Involved
Who's to be in the group doing the studying and planning? Here's my suggestion: CEO, CFO, Sales chief and CSR chief.
What's the subject of the study? The invoice itself. Get a bunch of 'em. Look at 'em. I mean really look hard, like you were the customer. Are they clear? Simple? Concise? Remember this little document is the Mother of all Business Documents for the print company. This ain't no finger-pointing, blame game; it's a how-do-we-get-better effort—how do we achieve the objective?
I look at the invoices I get from our local hospital. Ye Gods! It's no wonder our medical profession is in such a mess. Prompt? Like two months? Simple? Like you tell me what some of those things mean. I'm just a simple businessman-lawyer-accountant-writer trying to figure out the new prescription drug provisions, let alone that hospital invoice. So what do your invoices look like? What should they look like? Study them. What can you—what should you—eliminate?
Is it clear just when the invoice should issue? Does the Sales Agreement say so? What must the invoice contain? What about shipping? Is the invoice to include shipping costs or are these to be paid by the customer direct to the shipper? Postage? Is it the obligation of the customer to have the proper postal deposits made? What happens if the customer hasn't made the required deposits?