Managing With Data - Pre-Invoice and Invoice Audits

Post date: Aug 22, 2011 5:17:32 PM

The SMCP system is called the 'Control Panel' to highlight the fact that managers and owners are given 'control' of their company's critical daily information through the various reports and queries in the program.  As it is designed, the data provided should be useful for spotting trends early and exposing areas of the business that need attention.  To be efficient, reporting should provide a call to management action, not just academic browsing.

As a case in point, take a look at the Pre-Invoice and Invoice Audit List: these are similar in function and form.  Both list, in detail, the items shipped on any given day: however the pre-invoice shows the details on the ORDERS BEFORE they are actually invoiced and costed, and the Invoice Audit List shows the details on the resulting INVOICES AFTERWARDS.

Both reports show every possible piece of information the order/invoice carries: who created the order, who invoiced it, tax info, each item number, description, sell price, cost (NOTE: cost on the Invoice Audit List is ACTUAL cost, cost on the Pre-Invoice List is PROJECTED based on most recent cost), mechanic, item category, etc.  Additionally, they include links to extended information such as the complete order information screen, a link to the job cost details for the order, and (on the invoice audit list) a link to view the actual customer's invoice.  In short, this report provides a kind of mini-P&L on a daily basis, showing exactly the revenue and cost of good sold for each item.  This should eliminate the need to check for these pieces of information individually in other places.

To manage with this data correctly, here's what we recommend:

1) Each day, after all items have been shipped through the billing process, but BEFORE the orders are actually invoiced, a manager (whoever is responsible for reviewing the billing) should print the Pre-Invoice Audit List to his/her screen.  Alongside each order, there is a 'comments' box.  Here the 'reviewer' should note any questions, corrections, etc.: things like "Didn't we use fasteners?" or "Why are we selling this for this price?" or "Why does this item cost us this much?".  Any needed corrections in wording, etc., should be noted here.  All of those comments get saved; and then the person who is preparing to post the billing can review those comments and make corrections.  At the top of the report is a link to the comments made by each person: if "Joe Smith" and "Mary Jones" reviewed the billing on the Pre-Invoice, each has a link at the top: if you click the link to "Joe Smith", it will take you directly to his comments.

This brings the critical billing and costing process directly to the manager's attention, but without having to print reports on paper and pass them around, or review incrementally along the way.  As a result, attention is focused on the pertinent information, but time and other resources aren't squandered to do it.

2) After the billing is posted, it's a good idea to review the Invoice Audit List - this shows similar information, but details ACTUAL costs for each line of each invoice, after the costing and inventory relief happens.  Since there is no ACTUAL cost until the invoice is posted, the Invoice Audit List gives managers a window into the costing transactions, so that inventory discrepancies can be addressed.  A similar 'comments' system is in place here, too: comments made on the Invoice Audit List appear for everyone who reviews it subsequently.  This allows managers and people doing the actual billing to communicate easily about details, even between offices, without needing to send copies of reports back and forth.

Methodical review of these two reports should allow you to catch billing issues as they happen, and make on-the-spot corrections without slowing down the billing process.  If these are well-reviewed, there should be no surprises on the P&L at the end of the month.