- August 25, 2016
- Posted by: David Marshall
- Category: Business, Measurement
At one point I found out that 40% of all our invoices that were sent to customers came back as debit memos. That means there was something wrong with it, and it needed to be fixed on our end. If we wanted increased productivity in the back office, we had to figure out why this was happening.
In other words, four out of every 10 invoices had some kind of error on it. It could have been in pricing, the quantity we sold, the quantity we sent, or any other kind of error that required us to fix that problem on our end. All these errors affected more than just the invoicing. They affected the inventory, receiving, shipping, and accounting.
We improved the entire process by measuring everything and everybody quantifiably every month, as part of our accounting process, which said there had to be a reason for a credit to be issued, and that reason was measured and tracked. As we identified the problem, we determined whether it was training, competence, or the system, and we made the necessary corrections.
By improving the culture about invoices we were able to increase productivity.
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter or LinkedIn.