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Machine Learning : Blog Post

When to Automate the Billing Process

Final part in a five-part series

Most businesses have an accounting system that makes sense for them. However, an accounting system by itself is far from an efficiently automated billing process. Because the accounting system usually is a silo that is wholly separate from other operational activities of the company, keeping its information current often creates the need for multiple redundant entries of the same data, inefficiencies and sources of error.

Additionally, because the accounting system was designed to hold accounting data only, there often is a conflict over the need to hold extra data in one system over another, and in maintaining that data. Because sales and business needs require additional data -- such as grouping customers, products or events in unique and interesting ways -- reports generated by the financial system often aren't even good enough to manage the business at an operational level (for example by product line, customer type, etc.).

The result is that businesses often maintain the same types of data in multiple systems, they double- or triple-enter data, they move a lot of paperwork around the organization to get things done; and when mistakes occur they rely on humans to deal with them. In effect, their business processes become a series of workarounds to accommodate less than ideal capabilities of the systems they rely on.

So what are those ideal capabilities?

In a well-automated shop, billing is a natural result of operations and fulfillment. The quote is generated, converted to a sales order, parts are reserved from inventory or personnel are scheduled, and any other pre-fulfillment processes such as engineering are completed. As work moves into production, there may be a need to generate accounting entries relating to work in process, or to put parts on a truck or for other reasons. Also, inventory in need of replenishment should automatically begin to accumulate in a purchasing queue for a purchasing agent.


As work is completed, entries may continue to be made if needed. Importantly, though, when the product ships (or whichever triggering event is appropriate for your industry), invoices should be generated automatically, and possibly even delivered automatically via e-mail. If not delivered automatically, there needs to be a simple queuing system which a processor can scan through and approve for delivery, or print in batch for faxing or mailing. With the invoices sent, statements plus repayment notices should be delivered automatically at key milestones such as 30 days, 45 days, 60 days and so on.

Automating the billing process reduces the effort required in billing to just a few straight forward tasks such as maintaining the financial portions of customer records (for example credit terms), approving invoices for delivery, and making collections calls on those accounts which are severely overdue.

The value of an efficient billing operation is also in allowing key billing personnel to be more strategic in their choices and decisions. For example, what is the value of spending more time negotiating with key vendors for even small price reductions? It could be many times that of the cost of billing system automation, and alone could create a payback period of just a few months.

Although the automation of a billing system can be complex, the benefits can often far outweigh the costs. What's more, if your plan is to grow your business rapidly, you don't want to be hampered with the myriad of daily problems that a manual billing process will generate for you.

The return on investment of this particular automation is very tricky because both the costs and benefits are not always quantifiable; however, they are very clear. This is the heart of the company, and it needs to be operating smoothly. This article was originally posted on the Central Penn Business Journal Gadget Cube.

More Stories By Treff LaPlante

Treff LaPlante has been involved with technology for nearly 20 years. At WorkXpress, he passionately drives the vision of making customized enterprise software easy, fast, and affordable.

Prior to joining WorkXpress, Treff was director of operations for eBay's HomesDirect. While there, he created strategic relationships with Fortune 500 companies and national broker networks and began his foray into the development of flexible workflow software technologies. He served on the management team that sold HomesDirect to eBay.

During his time at Vivendi-Universal Interactive, Treff was director of strategy. In addition to M&A activities, Treff broadly applied quantitative management principles to sales, marketing, and product line functions. Treff served as the point person for the management team that sold Cendant Software to Vivendi-Universal. Earlier positions included product management and national sales trainer for Energy Design Systems, an engineering software company. Treff began his professional career as a metals trader for Randall Trading Corp, a commodities firm that specialized in bartering and transporting various metals and coal from the then-dissolving Soviet Union.

Treff received his MBA from Pepperdine University and a BS in chemical engineering from The Pennsylvania State University. http://www.workxpress.com

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