Efficiency Billing: Faster Payments, Less Hassle

Have you not always dreamed of getting paid faster? What if we told you that faster billing could help you achieve that? In this article, we will explain how implementing a shared invoicing file helped us being more efficient, reduce our billing time. Of course, you'll see that this is not the only advantage, since (spoiler alert) we were also able to reduce our DSO by 5 days…

1. Information and Structure of the Billing File

We have, of course, always sent invoices to our clients, by using various Excel files and communication channels, perhaps too many. Since the process was not entirely satisfactory, we attempted to implement a single, simplified file to help us. Our main objective was to optimize the invoicing process, and to have only one file that centralized all the information.

This “new” invoicing file, the one we implemented in January, is composed of various blocks of information useful to Dolead, particularly for the Account Receivable and the Sales teams.

A. General Information

This section of the billing file presents the general information necessary for all teams to identify clients. It includes the first and last names of the CSMs (Customer Success Managers) responsible for each client, as well as their associated squad. These details facilitate the management, filtering, and completion of specific data for each CSM. Additionally, the type of contract signed with each client is also mentioned, providing visibility on the nature of the established agreements. This specification allows grouping clients based on their contract type.

B. Billing Information

This section is divided into several steps.

The first step is to obtain the billing information from Dolead's internal data counting platform, which will be recorded in one column in the billing file. In another column, the actual billing information is verified. This verification is a check performed by the CSM, who confirms the amounts with the client.

If the amount confirmed by the CSM matches the one recorded in the internal platform, the CSM must put "OK" in the corresponding row for the concerned client. This allows the account receivable team to send the invoice. Conversely, if the amount differs, the CSM must communicate the actual billing information to be sent by noting it in the corresponding row for the concerned client.

In cases where there is a significant difference between the platform amount and the amount confirmed by the CSM, it is necessary to wait for the approval of the CSM and Finance Manager before sending the invoice. This information must also be noted in another specific column in the file.

Once the account receivable team has sent the invoice, a "YES" will be indicated in the column named "Invoice Sent?". This informs the sales team that the invoice has been sent, avoiding the need to copy them on emails, thereby reducing email clutter.

C. Summary Tab

This tab of the Drive file is useful not only for the sales team but for the entire company. It contains essential calculations for the Gross Revenue (GR) and Net Revenue (NR) of each squad. Additionally, a Delta calculation is performed, and there is a comparison between the actual billed amounts and the amounts shown in the internal platform of the company. Finally, the progress status of each squad is also presented, allowing the Team Lead to follow up with the concerned CSMs to expedite the billing process.

2. Reduction of Billing Delay

After a year of analysis at Dolead, we observed that the billing delays have decreased. This means that clients receive their invoices much earlier, reducing their payment delays.

Below is a graph showing the results.

3. The Unexpected Advantages / Benefits

As you might have guessed, the primary benefit we found with this "new" billing file and the increased communication with the sales team is the reduction in billing time.

After several months of use, we discovered other benefits, which may be a bit more surprising (or not 🙂)

Let's first discuss the impacts this can have externally, particularly on client relationships.

• We have reliable data. Indeed, the Finance team sets up the billing file with metrics provided by our technical teams. This is our first data check. The sales team then validates the figures before the invoice is sent: this is our second check. The invoice is then sent. We can say that we have a double, or even triple, check before sending each invoice, making it difficult to have more reliable data!
• A direct consequence of this is the drastic reduction in Credit Notes. Between May and December 2023, we observed a peak of 14 Credit Notes sent. With more reliable data, we are now, six months after the implementation of the file, down to just one Credit Note sent in May 2024. The trend continues, and we are determined to reach zero. Utopian, you think? 🙂

Client relationships have improved, but we have also felt the effects on internal communication, particularly between the Finance / Billing teams and the Sales teams.

• Our information sharing is facilitated: fewer different channels, fewer different processes, less time wasted, and everyone has the same information at the same time.
• Trust between the two teams has increased; we know we are here to work together, hand in hand. As we say at Dolead, "Your success is my success": both the Sales team and the Finance team are committed to sending reliable information to the client.

4. Towards a Reduction in DSO

The impact we felt after implementing this shared billing file is the reduction in DSO (Days Sales Outstanding). Essentially, this is the time it takes to collect the billed revenue.

Of course, several factors contribute to this, but one of the main ones is the reduction in billing time. Yes, the quicker the billing is validated, the quicker the client receives their invoice, and the quicker the payment is made.

Let's take two cases for the same client, who has a contractual payment term of 30 days. We bill for June’s data on June 30th.

1. The billing data is validated on July 2nd.
2. The invoice is sent on July 2nd: in this case, the invoice date is June 30th, and the due date is July 30th (30 days).
3. The invoice will be paid on July 29th.

In this case, the DSO is 30 days.

1. The billing data is validated later, on July 10th.
2. The invoice is sent on July 10th: in this case, the invoice date is July 10th, with a due date of August 9th (30 days).
3. The invoice will be paid on August 9th.

In this case, the DSO is 40 days.

At Dolead, we have observed this decrease across all our structures following the implementation of a shared file: we have gained nearly 10 days!

After all this, will you still think that Excel files are annoying? 🙂

By Chérine & Sandra

FAQ

What is efficiency billing?

Efficiency billing is a streamlined invoicing process designed to enhance accuracy and speed, ensuring businesses can invoice faster and improve cash flow.

Can efficiency billing be used regardless of location?

Absolutely. Our invoicing file is cloud-based, as Efficiency billing services typically are. Finance and Sales team can utilize them from any location with an internet connection, in a train, en route to the client for example.

What services are included in efficiency billing?

This question is a vast one, because each company finds Efficiency billing in what they specifically need. It can be automation of invoicing, optimization of billing processes, detailed metrics tracking, enhanced accuracy in financial transactions, etc.

What are the benefits of optimizing the billing process?

Optimizing the billing process through efficiency billing can lead to faster invoice generation, reduced costs, improved accuracy, and better cash flow management. As you might have read above. 🙂

How does efficiency billing impact invoicing costs?

Efficiency billing reduces invoicing costs by minimizing errors, and streamlining the entire billing process, leading to lower operational expenses.

What metrics are important in efficiency billing?

Key metrics in efficiency billing include invoice processing time, error rates, cost per invoice, and overall billing accuracy. These metrics help businesses measure and improve their billing efficiency.

How does efficiency billing ensure accuracy?

Efficiency billing ensures accuracy through advanced tracking systems that reduce manual input errors and provide real-time validation of billing data.