After three decades in the business, thinking I’d seen it all, but once when hosting one of our monthly webinars, I got shocked.
The focus topic that month was “Smoothing Out Snags in Your Billing Processes”. To open the discussion, I provided a list of common snag areas. And this is where I got shocked. Eighty percent of the credit pros said they are having ongoing, recurring product pricing problems.
For most, they are handling the problems before the bad price went to the customer, but it was severely delaying the process; and hence, when payment is received. For the less fortunate, they are dealing with Credit/Rebill issues because it is the customers who are finding the errors. Ouch!
Once I discovered the magnitude of this problem, we delved deeper, and I heard about paper trails and audits that had worked for some but were basically CYA maneuvers that still slow the billing process to a crawl.
Worse yet, horror stories of massive pricing spreadsheets that credit could not access (or were frightened if they did) to even get a correct price. And here is shocker number two. When I asked if they had confronted these problems in the billing process, the majority said no because they felt it was not within their authority!
So, bills are going out late or wrong, but because it is pricing that belongs with “sales,” they feel powerless. Could this be happening at your company? It’s highly probable!
So, let’s focus on solution steps:
- Ask your credit people if pricing is an issue.
- If yes, get details – how often, what products, and why, as well as the cost of delayed collections which will serve as a motivator.
- Assemble a “Solutions Group” consisting of Credit, Sales, Dispatch and GM or owner.
- Determine best practices pricing (At Meridian, we like matrix systems)
- Automate as much as possible including a way to input special pricing and have the system record who did the pricing.
- Address quotes, purchase orders and special pricing.
Pricing should not be off limits and taboo to your billing and credit people, especially if it’s holding up cash receipts!
And this brings me to an even bigger point of culture. The healthiest companies I know, with the fattest bottom lines, have created a culture where it’s not just OK to question everything, it’s expected. These companies have created an atmosphere of radical self-responsibility where people actively look for ways to make the company better through personal action.
In these companies, there is not blame or worry about going outside of authority lines or stepping on people’s toes in other departments. It’s a culture of fixing things, where failure is simply a learning experience.
I wonder what would happen to your billing processes and your cash flow if everyone in your company understood and used Servant Leadership. Exciting to think about, isn’t it? Maybe I wouldn’t get shocked on our monthly live webinars anymore!
