Page 39 - SMI Issue 62

Pay attention to invoicing – part 3By Roger Symes, Director, Marine Debt ManagementDebt ManagementIn this third article on invoicing, I outline steps that can be taken to encourage prompt payment. Themore your invoices are submitted, processed, approved and paid without need of further communications, the greater the savings for you and your customers. Invoice queries delay payment and tie up management and staff time.One thing that is simple to avoid is any misunderstanding about invoice due dates. Even if you offer simple terms such as ‘30 days nett’, this can be open to interpretation. Is it 30 days from date of delivery, date of invoice or date of receipt of invoice? Potential ambiguities can be avoided by stating the payment due date on each invoice. This helps whoever is processing invoicesat the customer’s end, since most accounting software packages give the option to input payment due dates.Secondly, it is worth havingyour bank account details on theface of every invoice. This avoidsthe need to provide the details ina cover letter or email message.Our experience is that such coversare often discarded when invoicedetails are input into the customer’scomputer system. If your bankaccount details are pre-printedbe sure to keep them updated. We have seen invoicesfrom multi-national companies that include incorrect or incomplete account information. Common errors are made in SWIFT codes (also known as Business Identifier Codes) and IBANs (International Bank Account Numbers). If you do not wish to pre-print bank account information, consider using stickers. They stand out and are especially helpful if your bank details are subject to change.Although domestically, it is now commonplace to confirm receipt of goods by signing an electronic tablet,such technology has yet to bewidely accepted by ship owners and managers. Most still expect a paper Proof of Delivery (PoD), signed and stamped by the ship. For some ship suppliers, the PoD is also the invoice. Others raise invoices separately to match the signed PoDs. Either way, the invoices have to be dispatched to the customer for processing, approval and payment.A few customers require all invoices to be transmitted to them electronically via a secure internet portal. However, for the vast majority of customers, you will submit invoices by mail, courier or email attachment. The method of invoice dispatch should have been previously agreed, preferably when you approved credit terms. Otherwise, when the order was accepted.Which method to use depends upon two factors: speed and security. It should not depend upon cost.If hard copies must be presentedit is far better to use a courier to ensure quick delivery and proof of receipt. However, we do see cases of documents going missing after being received by large companies because packages are not sufficiently well labelled for delivery to the correct person or department. Take special care if addressing a package in alanguage not used by those who will take delivery of it.If the customer will accept invoices submitted by emailattachment this has the advantage of speed. However, ifthe customer does not offer a dedicated email address forthis purpose, it is essential to ensure invoices are sent to the correct person. It also makes sense to obtain confirmation of delivery either by asking for an acknowledgement or by using a service such as readnotify.com or didtheyreadit.comIn the next issue of The Ship Supplier I will set out follow-up steps to encourage your customers to pay on time. uIssue 70 2016 | The Ship Supplier | 37