Do you have suppliers who don't send you bills on time and mess up your accounts month end?

In order to complete your month end on time, you need your suppliers to send you their invoices on time so that they can be passed by the relevant person and posted by you into the Creditors ledger. This will then allow you to produce a Profit & Loss A/c.

If you want a Profit & Loss A/c by the 10th of every month, you need supplier invoices to be received by you no later than the 7th of every month and even this is tight for producing accounts by the 10th.

So how do you ensure that you get your suppliers to send you invoices no later than the 7th. Simply tell them. Write to them and inform them that you need their invoices no later than the 7th. Tell them that if they arrive after the date that they may get delayed for payment processing, this could mean delaying payment so that thay are not paid until the following momths pay run. Tell them you produce your accounts by the 10th of every month and need invoices in on time to achieve this.

You must be careful how you approach your suppliers. Do not simply say that from now on if your invoices are late we will delay payment. They may put your account on hold as their system will have outstanding invoices due on a certain date which differ to yours and your account may automatically go on hold if they are not paid. You do not want to be unable to get supplies of goods because you wanted your invoices in by a certain date.

Not all companies are as efficient as yours in sending out their invoices to their customers on time. Work with your suppliers. An overseas supplier may not be able to get invoices to you by the required date because of postage delays. Find an alternative method to receive the invoices e.g. by fax or e-mail.

In writing a letter to them explain:
1. Why you are sending the letter - e.g. To complete your month end by the 10th of the month
2. Give them examples of when you need their invoices using real dates e.g. month end 31st jan, must receive invoices by 7th February. Empahsise you can receive invoices earlier in the month as well and would prefer not to receive a batch of invoices at the end of every month.
3. Ask them if they will be unable to comply with the request in the short term, because in the long term you need these invoices on time and if they have any difficulties with the request to contact you to arrange a suitable method of getting invoices to you on time.
4. Do not demand compliance. The bigger a customer you are to them, the more power you will have over them. But do not use this power, a small supplier may have its own staffing problems or currently have a disorganised method of invoicing sales. Be helpful, but still insist on invoices being received on time.
5. Always request that they send a statement to you every month, so that you can reconcile their account and check for any missing invoices.
6. Emphasise their gain that by having their invoices sent on time they can be processed quickly and that they can avoid payment delays by complying with the 7th of month deadline.

If your company needs an earlier date to produce accounts then request that earlier date. Some companies insist that any goods delivered in the last week of a month will treat the invoice received as being dated for the following month.

A very important part of the system to make this all work is to date stamp all invoices when they arrive, so that you can find out who is the offending suppliers and to find out who in your company takes to long to pass invoices given to them i.e. how long it takes to get the passed and back to you for posting into your accounts system.

see www.Help4Accounts.com for more help on bookkeeping
or goto www.Nilssondenver.com and contact me direct.