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Kate G. Austria Customer Billing According to A. Leverkuhn (2023) a customer billing is any kind of business event where a business collects money from a customer for goods or services provided. Many businesses have customer billing service departments, and in some industries, customer billing and customer service go hand in hand. Having good customer billing practices and competent customer service can help build customers loyalty and retention, where a business keeps its initial customers and thrives. Another article written by Stax Bill (2012) about the impact of billing on sales and Marketing said, Billing doesn’t just affect your customers; it also affects your business. More often than not, the billing system is a back-end system run by Operations and guarded by Finance. Marketing has lots of ideas to test pricing, launch special promotions, offer discounts and coupons, etc. But they don’t have direct access to the system which restricts their flexibility. This inability to make changes to the billing system is one of marketing’s most difficult obstacles and a common challenge for marketing teams. Marketing may encounter hindrances by billing processes such as in promotion and price testing, in which the expansion of your product catalog should not be affected by billing practices. Another is the inability to access vital information, which means that to do their jobs effectively, they need full and frequent access to data around churn, and customer lifetime value in order to build models to measure per customer profitability, etc., information integral for making successful business decisions. The third issue is the difficulty surrounding manual price testing, it was written here that changes can’t be made quickly, things get broken, short term plans are often never changed back and you end up with customers getting the same service at different prices, which can mean you’re either not making enough, or charging customers too much. Customers become unhappy, Marketing and Sales become frustrated and things quickly fall apart. Customer billing can also be used to impact customer service perception and costs. When a customer feels that they are being overcharged, the billing department may integrate usage information into each bill, which visualizes month-over-month changes in
consumption, can help customers quickly identify spikes in their usage and easily correlate differences in charges. Providing this additional tracking data reinforces why the bill may be more or less than previous months, and alleviates customers’ fear that they are being overcharged by providing greater transparency into the reason for their charges. Another is when the customer thinks that they already paid or not for the service. The billing department may use convenient, cost-effective electronic channels to proactively remind customers of upcoming due dates, as well as deliver alerts for missed payments. Whether sent via email, text, or IVR, these notifications can help customers keep their payment schedules on track. In fact, they can be a great way to improve customer experience, as an Opower survey showed 4 out of 5 utility customers were interested in receiving billing alerts. Lastly, when the customers are having trouble paying their bills, nowadays the billing department knows that a multi-channel strategy is necessary, not only to accommodate customer preferences but also to give customers multiple options to remit payment on time. But beyond simply offering multiple channels, utility companies must ensure they can uphold a consistent, intuitive user experience across all possible customer interaction points, enabling customers to easily self-resolve issues and, in turn, minimize time-consuming customer service calls. Level One Company (2018) According to a website article Cleartax (2022) billing is a process that plays an important role in ensuring that payments are received on time. These also enable businesses to function well and with ease. The importance of billing is as follows- Acts as an inventory tracker, helps in bookkeeping, serves as evidence when necessary, forms part of data collection, and lastly it helps businesses stay legally compliant. There is a study in Taiwan that was conducted during the COVID-19 pandemic. Since the pandemic prevents interpersonal contact, the research study provides valuable information for chain restaurant owners to develop strategies to increase the use of their mobile apps based on customers’ preferred payment methods. Cheng, et. al (2021) One of the Invoice formats is the Digital invoices, there is a study about customer Adoption of Digital Payment that aims to use this format. According to A. M. Sahi, et. al (2021), The global spread and use of the internet and mobile phones has contributed to the development of digital payments. Despite its growth potential, until now there is a
Business Performance Analysis. By analyzing cash bills, businesses can identify their top-selling products, their most profitable customers, and their peak sales periods. This information can be used to develop targeted marketing campaigns, improve customer satisfaction, and increase sales. Payment Collection. By issuing cash bills to customers, businesses can request payment and track which customers have paid and which ones have not.
Difference of Billing and Invoice These two terms may seem the same for many since both documents contain details of the sale and are part of the purchase cycle, however, there is still a significant difference between them. Billing refers to the amount due by the customer to the company. It is especially common in customer-prepaid retail establishments such as grocery stores, department stores, restaurants and catering establishments. Billing can be used for one-time and up-front payments and it also serves as legal evidence. On the other hand, Invoice is a commercial document issued by a business to its clients. This includes the total amount of products and services provided, the amount owed for the work mentioned, and contact information for both the seller and the buyer. The purpose of this is to request payment, at a specified payment term, such as net-30. Invoices can be used for both one-time and recurring and it also serves as legal evidence. Credit Collection Period When we say Credit Collection Period, from the word period, it is the allotted time given by the company which is also included in the invoices. It is also called “the grace period” or “net period”. It may be Net-10, 20, 30 or 60, meaning the customers are required to pay their bills within 10, 20, 30 or 60 days, depending on what the company has provided.
15 Types of Invoices Businesses need to be up to date to send invoices and ensure they are properly paid to ensure cash flow consistency. However, there are multiple invoices a company can send to a client at various stages of a project, depending on deadlines, industry types, compliance requirements, geographic dependencies, etc. Knowing what and when you need to send is very important. Invoices sent for one-time transactions: Here are the different types of invoices used in simple transactions between a buyer and a seller or service provider. Proforma invoice. It is an estimated invoice that the seller sends to the buyer prior to providing any goods or services. It states the estimated cost, delivery date, and other details about the goods to be delivered or the services to be completed. After screening the proforma invoice, the buyer gives the green light to the seller to start working on their side of the deliverables. Sales invoice (“Regular'' Invoice). A sales invoice gets sent to a buyer to request payment for a product or service. It contains fields such as seller information, buyer’s address, delivery date, payment terms, items and their rates, and the total price; it also has information the buyer can use to make payments, such as bank details and payment links. Overdue invoice. It is an invoice that is past its due date. When an invoice is sent, a due date for payment is often mentioned. When the buyer fails to complete the payment within this stipulated date, the sales invoice becomes an overdue invoice and the buyer becomes a defaulter. The seller can do any of the following: ● Send payment reminders and notifications about late fees ● Take legal action ● Waive off the invoice Consolidated invoice. It groups existing invoices under the same customer’s name and compiles them into a single invoice with one grand total. This saves the buyer a lot of time since they don’t have to pay for each invoice individually.
Invoices sent in projects When working on a project, you may need to deploy a more elaborate invoicing process. Take a look at the types of invoices used in projects: Retainer invoice. It is sent to a buyer to collect prepayments for a task that will be done in the near future. The amount mentioned in the retainer invoice is paid by a client to reserve and have access to a business’s services as required in the future. This is also common when collecting advance payments needed for capital or logistics, or as protection against cancellation. Interim invoices. These are partial invoices that contain only a portion of the final invoice’s fee to help fund the project and cover the operational expenses. Interim invoices are also used for larger, more expensive projects because the total amount can be broken down into smaller invoices to make it more affordable. The interim invoice amount is determined by the percentage of work completed or on the milestones achieved throughout the project. Timesheet invoice. These are used when businesses charge clients based on the number of hours their employees worked on the project. Timesheet invoices generally apply for services and are calculated by defining each employee’s per hour charges and then multiplying them with the total hours worked on the project. Some of the elements that are included in a timesheet invoice are the tasks worked on, hourly charges, total hours worked, the start and end date of the project, and administrative fees. Final invoice. It is the last invoice sent at the end of a project that highlights the total amount owed to the product or service provider. This total is calculated by deducting the retainer invoice and interim invoice amounts from the total amount owed. Like a regular invoice, the final invoice has fields like payment terms, the invoice creation date, items, subtotal, deductions (retainer and interim invoice totals), and the invoice total. Invoices sent as memos The following types of invoices are not used for sales but to make corrections to past transactions via credit and debit.
E-invoices. An e-invoice has a structured format that is issued, received, and processed electronically without any manual intervention. The Ways to send Invoice and What To Include In An Invoice Invoices are an important part of running a business, and learning how to properly create and send invoices can help you be more efficient and get paid faster. Ways to Send An Invoice Another decision a business will need to make is how the invoices will be sent. The answer to this question is simple for some companies, but not so simple for others. In some cases, business companies can even use a combination of these to ensure that customers received their bill. Here are the three most common ways to send an invoice: Mail. If your client doesn’t use email or online invoicing, take a printout of your invoice and send it in the mail. It is a slow process but this is something you should have considered before starting the project. Email. This is the most popular and quickest way to send an invoice. If you have created the invoice in a word processor or designing software, convert it into a PDF for enhanced security. Mention that you are sending an invoice in the subject line and write a short message in the body. Invoicing software. There are many invoicing software such as PayPal that you can use to draw up your invoice. The advantage of using invoicing software is there are lots of templates to choose from and branding is very easy. Customers have easy access to payment links, which makes it easier for them to pay you. What To Include In An Invoice While invoices can vary greatly, there are a number of standard elements that just about every invoice should include. Be sure to include these to ensure that your invoice has the right information and sets you up to get paid. Here’s what every invoice should include:
● Invoice number ● Business name and contact information ● Recipient’s name and contact information ● Description of services rendered (itemized list of services optional) ● Total price (including any additional fees, if applicable) ● Key dates (e.g., date of services rendered, date of invoice, and due date) ● Payment terms and conditions Conclusion Businesses need to be up to date to send invoices and ensure they are properly paid to ensure cash flow consistency. Customer Billing are essential documents in any commercial transaction. They perform multiple functions including record keeping, tax compliance, customer satisfaction, payment verification, legal protection, inventory management, performance analysis and payment collection. By issuing accurate and complete cash invoices, businesses can improve their financial records, promote transparency and trust in their transactions, and make informed decisions to drive growth and success. Depending on the company’s industry and business model, they may need to learn about different types of invoices. Learning and identifying the purpose of the invoices before creating and sending them is a must for any business. Getting paid is not the end of things, after receiving payment, thank the client irrespective of whether it was a one- time payment or a recurring one. Good customer billing practices and competent customer service help build customer loyalty and retention. This is where the business retains its original customers and thrives.
References: Definition/Review of Related Literature: https://www.wise-geek.com/what-is-a-customer-billing.htm https://staxbill.com/the-impact-of-billing-on-marketing-and-sales/ https://www.golevelone.com/use-billing-impact-customer-service-perception- costs/ https://cleartax.in/s/billing-in-accounting https://www.tandfonline.com/doi/abs/10.1080/15378020.2021. https://doi.org/10.3390/joitmc Importance of Customer Billing: https://margcompusoft.com/m/cash-bills-in-business- transactions/#:~:text=Cash%20bills%20are%20an%20essential,performanc e%20analysis%2C%20and%20payment%20collection. Difference of Billing and Invoice: https://www.deskera.com/blog/bills-vs-invoice/#bill-vs-invoice-main- differences Credit Collection Period: https://gaviti.com/glossary/credit-collection/ https://www.nerdwallet.com/article/small-business/net- 30 15 Types of Invoices: https://www.zoho.com/invoice/guides/15-types-of-invoices-for- businesses.html The Ways to send Invoice and What To Include In An Invoice: https://www.forbes.com/advisor/business/how-to-send-an-invoice/
