Not all businesses are cookie cutters of each other, even in the same industry. Different businesses have different cash flows. Some businesses have multiple small sales orders every day, meaning the finance department can be working flat out to cope, with complicated paperwork and form filling sometimes creating bottlenecks.
If a vital member of staff is off sick, on holiday or a role is temporarily vacant waiting to be filled, it can stretch the department to breaking point. Calling in temporary staff is not always the answer, they have to be trained in your way of doing things and are expensive; they are not a good long-term answer. Similarly, if a business has fewer orders of high value, it’s important to input these correctly and efficiently.
Your business won’t be paid until the goods or services have been delivered and the correct invoice has been raised. Any fault along the line will cause delays – and delays cost money. This is particularly painful if large sums of money are involved. A small fault in the finance department could mean a temporary negative cash flow, which could be serious. For a small business, this could be critical. Perhaps money had been earmarked to pay a VAT bill? This money will have to be found from somewhere else – not easy when you have already had to raise capital to start the business. So, mismanagement in the finance department through sheer volume of work or human error with large invoices could be bad news for your business.
Many businesses might operate somewhere in the middle – moderately valued invoices at fairly regular intervals – but the truth still holds: any incompetence – intentional or otherwise could be bad news for your overall business.
Along with the effect on the business, there is the more worrying effect it could have on your supplier. People generally don’t like mistakes, especially if they occur regularly. There is the distinct possibility in this case that the supplier becomes disaffected and decide to use a competitor.
But all is not lost in this gloom and doom. Using outsourcing for your sales invoices could be the answer. Imagine having them raised correctly every single time, even if you process lots of orders daily. Don’t let your finance staff sweat the small stuff – it could be a very big mistake. Better outsource and be on the safe side. This will relieve your finance department of a great deal of responsibility and release them to do more important strategic accounting.