It can be said that transaction documents are the lifeblood of a business. They bring in cash flow to your organization, which ultimately means you get paid. However, the process of sending and receiving transactional documents can be labor intensive and result in negative cash flow if it is not conducted in an efficient manner.
Episode 2 of our Whiteboard Educational series dives into the anatomy of transactional documents, the different techniques companies use to handle this process, and the best transactional document management practices.
If you or your company has ever made a big purchase, you’ve probably received some form of a transactional document. Depending on the service you are paying for, you could receive either an invoice or a statement. What’s the difference between the two transactional documents and how important are they to an organization?
Transactional documents are important because they represent the lifeblood of your business, also known as cash flow. You send your clients an invoice or statement with the expectation that you will receive payment in full and within negotiated terms; thus, protecting cash flow and delivering positive revenue results.
An invoice is provided when there is a singular transaction that is typically conducted immediately when a service is rendered or a tangible product is purchased. Invoices typically exist within and serve commercial applications. However, multiple assets or purchase executed at the same time can lead to significant detail lines and large balances or sums represented on the invoice. If the invoice details or balance are too large, commercial companies might send a statement instead so that their client has a better idea of the itemized assets and services they are being charged for.
A statement lists a history of events or services that are generated on a periodical basis (i.e. every 30 days, every quarter, bi-annual, annual). Statements are very common in healthcare marketplace because patients are more likely to visit their doctor more than once a month.
When starting off as an organization, you might not have the physical resources to print out each invoice or statement and mail them through the post office every day. In the past, companies would bill their clients once a week by utilizing the ALPHA (A-K, L-…) technique, which is tedious and has a negative impact on your cash flow. However, not sending out invoices or statements frequently enough will also negatively impact your cash flow.
What’s the solution to this financial and operational challenge? Automation.
Only 15% of the corporate world today outsources their invoicing processes. Many of them still employ Central Reprographics Departments that are devoted to this invoicing process. These are the companies depicted in Hollywood movies that are constantly running around the office with heaping carts of mail. It can be very labor intensive and a cost ineffective process.
If your company is ineffective in managing cash flow, is overwhelmed when employing manual processes, or is still utilizing outdated means to deliver transactional documents to its clients, visit our website – www.etacticsinc.com.