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Protecting cashflow and margin

29 June 2021

In cleaning margins are tight, and a credit controller is an expense that many smaller companies cannot afford. Christine Burright believes enlisting the help of technology in making sure prompt and accurate invoicing, backed up by effective cash collection, is the norm rather than the exception.

THERE ARE six typical invoicing challenges facing cleaning contractors:

  1. One-off jobs, including subcontracted work, are scheduled, managed and invoiced using manual spreadsheets. Failure to track the status of jobs — whether are they scheduled, onsite or complete — leads to delayed invoicing and inaccurate accrual in the accounts
  2. Jobs are costed incorrectly in the first place, with insufficient resources allocated or client sign-off not formally obtained. This results in disputed invoices, underpayment and margin erosion
  3. Invoices are not itemised in sufficient detail, causing clients to reject them or delay payment whilst they raise queries
  4. Multiple cleaning tasks or work carried out at different sites in the same client’s portfolio are not consolidated to a client’s monthly invoice, resulting in income being missed completely
  5. Reliance on the manual production of invoices for rechargeable consumables leads to mark-ups on supplier prices being incorrectly calculated or items being missed off an invoice altogether
  6. The application of annual inflationary increases to contracts relies on the manual checking of contract anniversary dates, risking the late notification of new charges and resulting in margin loss.

Let integration and automation take care of business
By using the formal framework of integrated business software to manage client invoicing and debt management, you achieve several important objectives.

You no longer rely on your admin team to check if one-off work has been scheduled, completed and invoiced. The software monitors that for you. Your managers never initiate work, either through internal staff or subcontractors, without correctly resourcing and accurately pricing it first, using the software’s workflow function for sign-off. 

Your software automatically invoices rechargeable consumable products to clients at the moment delivery is confirmed by your supplier, using the mark-up assigned to each individual client.

You clearly define all your client billing information requirements in the system, directing the accounts software to present the invoice in exactly the manner your clients have asked. 

You use your software’s “effective date” function to log future changes to client charges in advance, allowing the software to automatically retrieve the new monthly invoice value, pro-rated as appropriate, when it’s due. No need to maintain paper records of future changes. 

You use the software’s debt-reporting function to track aged debt, giving you the tools to chase down late payments. 

There are many ways in which an investment in integrated ERP (Enterprise Resource Planning) software protects your margin, but few are as important as the timely and accurate invoicing of work you have completed and the prompt collection of income you are due.

Christine Burright is marketing multimedia specialist at Team Software

For more information visit teamsoftware.com/invoicing