Accounts Receivable Dispute Prevention: The Case of the Missing Invoice

Accounts Receivable Dispute PreventionManufacturers have long practiced poka yoke – a Japanese strategy for error-proofing their manufacturing processes to improve quality. There are many strategies that businesses can implement to error-proof their accounts receivable processes to prevent invoice disputes that are within their control. Below are just a few suggestions for accounts receivable dispute prevention so you keep them from happening, get paid faster, and focus on more important issues.

Missing Purchase OrdersAn interesting story by Kathy Hoffelder titled “Why Firms Don’t Pay Their Invoices” appeared July, 30 2013 on CFO.com. According to the story, one company, TermSync, conducted a study of 100 financial executives, and found that 49% cited ‘invalid or missing purchase order information’ as a reason for customers not paying their bills.

This is certainly a problem that could have been prevented. Depending on your accounting system, you may be able to configure the system to require a purchase order when entering an invoice for a particular customer. However, many entry-level and midmarket accounting and ERP systems simply don’t have this type of functionality.

As an alternative, you could implement a credit and collection system such as Anytime Collect to notify you when an invoice for a customer is missing a purchase order number. Simply define an action for a customer (or group of customers) that checks to see if the customer requires a purchase order number and then checks to see if the invoice has a purchase order on it. If the invoice does not have a purchase order, the system can create an alert notifying you that you will have a problem getting payment, and you can address the issue very early in the process before the invoice is past due.

 

Identify Customers That Require Purchase Orders on Invoices

Create Actions When the Purchase Order is missing from Customer Invoices

 Accounts Receivable Dispute Prevention

 

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