Improving receivables collections with PDF invoices
One of my favorite podcasts is Steve Bragg’s Accounting Best Practices. Steve is the author of over 40 accounting books and a former CFO of both public and private companies. His podcast covers many topics relevant for an ERP professional, ranging from process best practices, to reviews of accounting technologies, to commentary on IFRS and GAAP.
The podcast has been active for a few years but I discovered it only this past January. Since then I have been both listening to new episodes and catching up on old issues.
Besides being informative, Steve brings a very practical point of view to the accounting technology, providing a good insight in what a CFO expects from an accounting software and often commenting on what worked for him as a user.
In episode 42, Steve discusses how printing invoices in PDF format can improve the chances of collection. PDF invoices have the advantage of being easy to generate and email to customers who receive them in a timely manner in a format that is easy to read, understand and print. In his experience, this simple practice is one of the most effective tools to not only reduce overdue receivables but also to simplify the collection of overdue items. Using PDF invoices, Steve has been able to handle over 50% of overdue receivables with one single email.
As a software professional, I am always surprised by how the simplest things are often the most effective.
Steve concludes that episodes recommending listeners to buy some PDF conversion software and returns to the topic in a later episode pointing to additional tools, some of which are offered as freeware. However, regardless of the license type and cost, using an external PDF generation tool is time consuming. You need to install the PDF virtual printer, generate the PDF output, archive it and then email it to your customers.
Openbravo offers the ability to generate PDF invoices natively. This feature has been available since the beginning of the project and recently went through some significant improvements. Starting from 2.50 MP20, all the printed document formats (customer and supplier invoices but also sales orders, shipment notices, etc.) have been revised to have clearer and more complete formats. They also support additional parameters allowing you to fine tune the graphical layout of your invoices. What previously required a developer with Jasper Reports skills is now within reach of end users:
- If you print your invoices on plain paper or you email them, you can configure whether your company logo appears on the invoice.
- Similarly, you can control whether your company address appears on the invoice.
- You can print a different logo and address depending on the organization that issues the document.
- If you print your invoices on company letterhead, you can control the size of the header margin to ensure the best fit with your existing brand graphic design.
The entire process Steve describes is fully automated in Openbravo. The combination of PDF output features and email capabilities allows you to send PDF invoices to your customers directly from the application either en masse or on a document by document basis. The email message can be based on an email template for a completely touchless process, or can be manually edited to add explanation of complex invoices, further reducing the risk of billing disputes. You can also automatically archive the invoices you emailed and keep an auditable trace of the documents you sent.
If you are looking for a solution to manage customer invoicing and collections, you should give Openbravo a try.