Jared King

3 reasons to fix broken invoicing processes before automation

If your business is struggling to manage a lot of back-end processes, it might seem like automation is the answer you need.  ...

If your business is struggling to manage a lot of back-end processes, it might seem like automation is the answer you need. Just automate all those manual processes to speed things up, and you’re done. Right?

Not so fast. Automating a faulty process by taking out manual human intervention can be a recipe for disaster. Consider an automobile plant with a standard assembly line. Sending parts through the line more quickly without a way to assemble the cars faster will only result in a pile of metal.

We see this every day in our conversations with companies struggling to manage billing processes. Many are desperately in need of a faster, more streamlined process. However, in order to be successful, they must improve their underlying manual processes before automating them.

Here are a few gaps we see when companies apply automation to inferior invoicing processes:

Duplicate work

Let’s say your current manual processes are duplicative. Transactions and/or invoices get duplicated on accident. Because of your current manual oversight, you catch some percentage of these duplicate charges before they happen. The others are passed through to the customer, who contacts you to resolve them.

Now, imagine that you take your existing process and apply automated invoicing to it. Transactions are connected from your point-of-sale (POS) system to your invoicing platform. The difference now is the transactions are taking place real-time, without your manual oversight - so you catch none of them.

Duplicate work in a manual setting creates duplicate work in an automated setting. Before applying automation, figure out out how to rid your processes of any duplication.

Disconnected systems

There’s not one business system that can do everything (and do it well). In order to have a full picture, disparate systems must be connected. But that doesn’t always happen.

Maybe your company uses a primary payment gateway, but it’s not connected to your invoicing platform or your accounting software. Payments don’t get recorded outside the gateway. Invoices aren’t connected to payments. Customers receive invoices marked “due” when they’ve already paid. You get the gist.

In order to leverage the power of automation, all these systems have to talk to each other. And don’t get us wrong: the doesn’t mean you have to become a developer and manually build out each integration. But, do consider manual ways you connect systems. Even if it is just a mapping of fields to each system and a daily sync, it’s a start.

Poor customer experience

The last thing you want to do with any process change is negatively impact customers. However, automation on top of inadequate invoicing processes may do just that.

Many businesses spend a great deal of time chasing payments. If you’re one of them, automated invoicing chasing may sound like a fantastic idea. Before launching it, think carefully about how it might impact customers.

Does each customer have multiple transactions per billing cycle? Do you send one invoice per transaction or a consolidated invoice? If each transaction generates an invoice and a customer has 5 transactions in one month, that means a minimum of 5 chasing reminders (!). That type of constant communication can create customer fatigue that may lead to lost revenue.

To avoid churn, it’s critical to understand how automation will impact your customers. Put yourself in your customer’s shoes to learn how automation efforts may change their experience - for better or worse.

When applied correctly, automation can provide massive benefits.

The key to effective automation is to have solid manual processes to start. With the groundwork laid, time savings, cost savings, and an improved customer experience are all achievable outcomes. To learn more, take a look at success stories from Invoiced clients AJ Tutoring, Flick Electric, and Immigrant Law Group.