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.