The Margin of Error. Assessing the impact of invoicing mistakes on the bottom line. White Paper

Transcription

1 The Margin of Error Assessing the impact of invoicing mistakes on the bottom line White Paper

2 The Margin of Error Assessing the impact of invoicing mistakes on the bottom line Background FinancialForce.com has identified a worrying phenomenon, which research shows may be seriously affecting the cash-flow of many businesses, at a time when they can afford it the least. The problem of mistakes in invoices which the company has dubbed the Margin of Error is made many times worse by the common business practice of submitting multiple invoices at once. If a customer fi nds an error on even one, it will often place the entire batch on hold for verifi cation. This can take weeks (sometimes, even months) and delay payment for an indefi nite period a serious concern for any organization or company trying to weather hard economic times. Now FinancialForce.com has published survey results that show accountants blame the Margin of Error for thousands of dollars in delayed monthly revenue. The survey In order to determine the extent and impact of the Margin of Error problem, the company carried out a survey of more than 100 US accountants at small-to-medium-size businesses (SMBs). It found that the issue is both costly and widespread. A large percentage of respondents confi rmed that invoicing is a common source of cash fl ow problems and a signifi cant number estimated that, at their companies, improper invoicing delays the receipt of thousands of dollars of revenue per month. 2

3 Key findings 87% of respondents said that cash flow has become a more important problem for their company in the downturn. 46% said that invoicing delays are definitely or somewhat a common source of cash flow problems for their company. 28% estimated their company has at least $5,000 a month delayed due to invoicing errors. 17% have seen payments greater than $50,000 delayed due to invoicing errors. In a possible sign of disconnect between finance departments and upper management, 58% of respondents reported that finance was feeling more pressure to invoice properly in the downturn. However, almost 60% said their company was not at all looking for ways to improve its invoicing process. Conclusions An urgent need to safeguard cash flow Cash flow is the lifeblood of business, especially in times like these when credit is hard to come by, said Jeremy Roche, President & CEO, FinancialForce.com, inc. The results of this study show that the Margin of Error is worse than a nuisance. It s a drag on the bottom line. For small-to-medium-sized businesses, payment delays can mean the difference between survival and bankruptcy. Luckily, there are several ways to minimize the risk of these errors, so long as management listens to finance and takes the problem as seriously as it deserves. We hope this survey prompts businesses to have those internal discussions and find a solution that works for them. End-to-end revenue tracking One of the more common causes of invoicing error is the use of finance software that lacks the ability to track sales through a company s Customer Relationship Management (CRM) system, from the salesperson s first contact to the recognition of revenue. To remedy this problem, FinancialForce.com has developed powerful Opportunity to Cash functionality in its on-demand accounting application. Built on the Force.com platform, FinancialForce Accounting is completely embedded within salesforce.com s world-leading Cloud Computing CRM application and so enables accountants to go from their opportunities in Salesforce CRM to create an invoice at the click of a button and post the transaction to their sales ledger. This gives users the most complete view possible of the sales process and eliminates re-keying of data, minimizing the chance for confusion and error. FinancialForce Accounting (which was originally introduced in 2008 as CODA 2go) is the first 100% native, realtime accounting application developed on the Force.com Cloud Computing platform and is leading the industry in opening up the benefits of cloud accounting to organizations of all types and sizes. FinancialForce.com s mission is to deliver the future of accounting: unique cloud accounting applications that give accountants and CFOs, on-line, real-time financial information, always in balance and always up to date. This gives them a better understanding of their business, and the confidence of reliable figures, from secure systems, looked after for them by the world s most trusted cloud computing platform for businesses. 3

4 4 Appendix one The Margin of Error : survey results

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6 About FinancialForce.com FinancialForce.com is revolutionizing the future of accounting by doing for finance what salesforce. com has done for CRM. FinancialForce Accounting is a unique online cloud accounting solution the only one to be built natively on the Force.com platform from salesforce.com. It allows fi nance teams of organizations using Salesforce CRM the world s most successful online solution to truly Speak Salesforce in a way no other cloud accounting system can do, dramatically simplifying processes like invoicing, collecting cash and servicing customers. Having created the only fi nancial management solution that Speaks Salesforce, FinancialForce.com does for fi nance what salesforce.com has done for CRM it gives organizations a complete understanding of their fi nancial and business performance that is 100% up-to-the-minute and accurate. FinancialForce Accounting s unique real-time design is always in balance and up to date, delivering the confi dence of reliable fi gures from secure systems, looked after by the world s most trusted enterprise cloud computing platform. It is aimed at organizations outgrowing their original accounting applications and looking for a simple yet powerful accounting solution with the capability to support them as they expand locally and even internationally. FinancialForce.com was funded with an investment from UNIT4 (parent company of the award-winning CODA Financials on-premise global accounting software) and salesforce.com. It combines the 30-year successful track record of designing and building CODA fi nancial applications, with the salesforce.com platform s decade of dependability, availability and security. The result is a range of cloud computing applications, including FinancialForce Accounting a full Software as a Service (SaaS) accounting application delivered on a subscription basis; the fi rst international SaaS accounting system developed on salesforce.com s cloud computing platform, Force.com. 6 Copyright FinancialForce.com, inc. All rights reserved. The information contained in this document is intended for general information only, as it is summary in nature and subject to change. FinancialForce.com and FinancialForce Accounting are trademarks of FinancialForce.com, inc. Any other brand names and/or trademarks referenced herein are either registered or unregistered trademarks of their respective proprietors. WP0045ff3