What are the most effective invoicing controls in a deflationary environment?

1 Understand the impact of deflation

The first step to implement effective invoicing controls is to understand how deflation affects your business and your customers. Deflation can reduce the demand for your products or services, as customers may postpone their purchases or switch to cheaper alternatives. It can also erode the value of your receivables, as you may have to accept lower prices or offer discounts to retain your customers. Moreover, it can increase the risk of bad debts, as customers may face financial difficulties or default on their payments. Therefore, you need to monitor the market conditions and the price trends, and adjust your pricing strategy and your credit terms accordingly.

2 Establish clear invoicing policies and procedures

The second step to implement effective invoicing controls is to establish clear invoicing policies and procedures that reflect your business objectives and your customer needs. Invoicing policies and procedures should define the roles and responsibilities of the invoicing staff, the invoicing frequency and schedule, the invoicing format and content, the invoicing methods and channels, the invoicing approval and verification process, and the invoicing dispute resolution process. Invoicing policies and procedures should also be communicated to your customers and your internal stakeholders, and be reviewed and updated regularly to ensure compliance and efficiency.

3 Automate and integrate your invoicing system

The third step to implement effective invoicing controls is to automate and integrate your invoicing system with your other business systems, such as your accounting system, your inventory system, your sales system, and your customer relationship management system. Automating and integrating your invoicing system can help you reduce errors and delays, improve accuracy and consistency, enhance security and auditability, and save time and costs. It can also help you generate and send invoices faster, track and monitor invoice status and payment status, and analyze and report invoice performance and customer behavior.

4 Implement quality checks and controls

The fourth step to implement effective invoicing controls is to implement quality checks and controls throughout the invoicing cycle, from invoice creation to invoice collection. Quality checks and controls can help you ensure that your invoices are correct, complete, and compliant with the applicable laws and regulations, and that they match the agreed terms and conditions with your customers. Quality checks and controls can also help you detect and prevent fraud, errors, or disputes, and resolve them promptly and effectively. Some examples of quality checks and controls are invoice verification, invoice reconciliation, invoice authorization, invoice confirmation, invoice audit, and invoice feedback.

5 Monitor and measure your invoicing performance

The fifth step to implement effective invoicing controls is to monitor and measure your invoicing performance using relevant indicators and metrics, such as invoice accuracy, invoice timeliness, invoice delivery rate, invoice payment rate, invoice collection rate, invoice aging, invoice outstanding, invoice write-off, and invoice customer satisfaction. Monitoring and measuring your invoicing performance can help you evaluate the effectiveness and efficiency of your invoicing process, identify the strengths and weaknesses of your invoicing system, and discover the opportunities and threats of your invoicing environment. It can also help you set and achieve your invoicing goals and targets, and implement continuous improvement actions and initiatives.

6 Adapt and innovate your invoicing practices

The sixth and final step to implement effective invoicing controls is to adapt and innovate your invoicing practices to cope with the changing needs and expectations of your customers and the market. In a deflationary environment, you may need to offer more flexible and attractive invoicing options and incentives to your customers, such as discounts, rebates, rewards, loyalty programs, payment plans, or value-added services. You may also need to leverage new technologies and tools to enhance your invoicing capabilities and competitiveness, such as cloud-based invoicing software, electronic invoicing platforms, mobile invoicing applications, or blockchain invoicing solutions.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?