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Debt Management

Pay attention

to invoicing

By Roger Symes, Director, Marine Debt Management

I
n previous issues of The Ship Supplier, I’ve covered prudent world-wide but whose business is conducted via separate
steps to take before supplying a ship on the promise of future companies, incorporated in different counties under various

payment. Now it’s time to examine the document upon whichnames. Another is the company that does business using an
your prospects of recovery will depend – your invoice.anglicised version of the name registered in its native country.

Every year, at Marine Debt Management, we are asked to Also, we often encounter the sole trader who supplies ships

collect debts unpaid due to poor invoicing practice. Often theusing one or more names other than his or her own.
invoice raised has resulted in ambiguity exploited by the debtor All of the above can cause problems. A buyer may insist that

to delay payment. As well as errors and omissions, we often see the invoice is raised by the party named on the Purchase Order
invoice formats that lack clarity and are confusing. This applies (P/O). Another reason for frequent payment delay is when

both to pre-printed invoices and those individually produced remittance is requested to be made to someone other than the
using word processing or spreadsheet software.party named on the invoice or P/O. Sometimes such queries are

These are problems as much for the multinational using a raised only because the buyer uses the apparent discrepancy as
standardised invoice layout worldwide as the small company an excuse to delay payment. Other times the buyer’s lexibility is

that updated its computer system but is still using old constrained by anti-money laundering compliance requirements
stationery. It pays to think about the person in the ship owner’s of banks or local regulatory authorities. Such dificulties are best

or manager’s ofice who, each day, must receive, check and avoided by adopting a consistent approach and ensuring your
bankers will accept funds addressed to every trading style used.
approve numerous invoices from around the world, most in a
different language from their own. Making their lives easier will Although almost all invoices are now settled by bank

reduce payment delays.transfer, it is surprising how many suppliers still fail to inform
Since invoices are legal documents, the laws of many customers of their bank account details. I recommend this

countries stipulate what information invoices must contain. It is information is shown on the face of every invoice. Not only
worth checking that your invoices meet the legal requirements does this ensure it is never forgotten, it also avoids the need

of all the jurisdictions in which you operate. Treat whatever is to separately send remittance instructions. Should a cyber
required by law as the minimum. Add extra data if this will aid security breach lead to hackers instructing customers to pay to

the recipient in checking and verifying your invoices.a “new” account, any such attempt will more likely be detected
Next, think very carefully about how the name of your as fraudulent if your account details are on your invoices.

business is displayed on your invoices. I estimate that more In an ideal world all your invoices will be paid without need
than half of all ship suppliers trade using one or more names of further communication. All moves made towards that goal

different from their legal registered name. A typical example will bring cost savings. In the next issue of The Ship Supplier I’ll

is the multinational group that adopts a single trading namedetail further ways of improving invoicing eficiency. u

22 | The Ship Supplier | Issue 68 2016