Controls for Billing (#11)
/In this episode, we discuss the controls associated with billing. The key points made in the podcast are divided into three parts, which are for manual systems, computerized systems, and general controls.
Manual Billing Controls
Verify prices being billed against a standard price list
Proofread larger invoices prior to mailing, to minimize errors
Have the originating salesperson verify invoices, to spot errors
Verify any unusual payment terms
Verify the applicable sales taxes being charged
Stamp each envelope with “address correction requested”
Computerized Billing Controls
Print and review the invoice preview report to ensure that all items to be billed are accurate
Reduce access to the billing software, to minimize the risk of fraudulent billings
Controls for All Types of Billing Systems
Segregate the billing and collection duties, to keep anyone from falsely issuing a billing and then collecting the related funds
Compare contract prices to what is being used for the prices on the most recent invoices
Monitor customer complaints regarding invoices
Issue month-end statements to customers, to see if they can spot any errors
Compare the quantities shipped to the quantities invoiced
Clean up the invoice format to make it easier for customers to read
When entering an invoice into a customer’s online payment system, print the confirmation page to verify that it was entered
Segregate credit memo creation from the cash receipts function
Require approvals for the creation of larger credit memos
Charge credit memos against salesperson commissions, so that they have an incentive to investigate the memos
Audit a selection of credit memos