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Everybody Wins With Strong Operations

15 May, 2009 By: Jim Boulden imageSource

Everybody Wins With Strong Operations

Is your company providing the best possible customer service? That has always been a question that is difficult to answer, as most of the time, unless a customer sends words of praise or a letter of dissatisfaction, you don’t know and believe that it is something that cannot
be measured. Customer surveys may give you somewhat of an indication, but more often than not, few are returned and they may be filled out by the wrong person. I believe that by looking within your own organization the answer to your customer service levels is readily available.

All organizations, regardless of size, typically have people who are dedicated to both processing customer billing as well as correcting billing errors. One of the keys to understanding the level of customer service that your company provides rests in that last process. Does
your billing person spend an inordinate amount of time correcting billing as opposed to providing productive services to your company?

When you have people spending their time correcting billing it is a non-productive activity that adds no value to the company and is truly a profit drain. If you are looking for a way to help reduce your G&A expenses here is a good place to start. Imagine how much more
productive your organization would be if you got billing correct the very first time!

Not only is the correction of inaccurate billing a non-productive activity for your billing person/people, it is also one of the key areas that are reflected in delinquent receivables. That is the second place you can look to determine if you are providing good customer
service; the status of your receivables. Do you have an unacceptably high amount of delinquent A/R? I believe that the vast majority of customers want to pay their bills timely and in full, but many fail to do so for the simple reason that the billing is inaccurate. Sometime it
is as simple as a purchase order number missing from the invoice, or it can be far bigger issues such as the meters are not reflective of what they truly ran during that period. All of the issues are correctable, but at what cost?

For Effect

Here is a typical scenario. Your company first hears about the invoice errors on the first collection call, which is usually after the invoice ages over 30 days. Your people then spend some amount of time researching the problem, which can take several days and involve
several people if it involves inaccurate meters. The next step is to recalculate what the correct billing should be, credit out the old invoice and then submit the new invoice for billing. Once that is done, your people re-issue a new invoice and mail it to the customer. In the
customer’s eyes, the time clock has now just begun and they have 30 days to get that invoice through their system and get payment out to you. So what should’ve been a simple one step process, has turned into a multi-step process that has wasted your biller’s time, your
collector’s time and worst of all, the customer’s time.

Consider the cost of the unproductive time by your people and the cash flow implications of the delays in payments and you can easily see why it is important to look at this area of your business and understand exactly what type of customer service you are providing. I suggest
that if you have a high DSO or a high amount of delinquent receivables, you may or may not have a collections issue, but rather a quality of billing issue. Taking the steps to fix that can not only improve your customer service levels, but can also help you improve your cash flow
and reduce your G&A expenses. So, while improving your company’s image to your customers, you can also positively impact your bottom line.

Once you identify that you have an issue in this area the next step is to put in place the correct steps to resolve the issues. It is not as simple as just telling your people to get better when processing billing. It is more important to make sure that you have the correct
technology in place to assist in gathering meters and processing billing. Once you have that, the most vital step is to make sure that you have the correct process in place to minimize the people hours involved yet maximize the accuracy.

Map Efficiency

Take the time to map out your current process; does it look like a road map to nowhere? The best billing process utilizes the best technology for your size company and is streamlined and efficient, yet accurate. Many times it is difficult to redesign a process from within
your organization because the people involved in the current process have been doing it the same way for so long and have a natural resistance to change. This is where an outside consultant can be of assistance. They can work with your people to help you re-design a process that
maximizes efficiency and accuracy to accomplish your goals, minimize the costs and improve cash flow and customer service.

With the current economic situation, it is extremely important to your company’s success to be perceived as a valuable vendor in your customer’s eyes. This not only entails providing state of the art products and services, but also involves being known as a vendor who can be
counted upon as one who provides accurate and timely invoices. If you can do that and at the same time reduce your G&A expenses, it is a double benefit to your company. Take the time to review your processes, technology and people and you will begin to see improvements in the
bottom line.


Jim Boulden is an operations consultant with Strategy Development, a management consulting firm for the technology and outsourcing space specializing in business planning, sales effectiveness, advanced sales training, and operational and service improvement (www.strategydevelopment.org).
Jim specializes in improving companies’ back office operations, improving cash flow and reducing G&A expenses. At 954-796-9302 or boulden@strategydevelopment.org

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