Accounting for your recoverable costs, and collecting them timely, is an important component of your cashflow’s health. This means your company has two collection targets: collections from consumers and recovery of costs from your clients.
The faster you gather and post your costs and invoice your clients, the quicker you can recycle that cash into your company. Not accounting for all your recoverable costs, or delays in billing or reconciling these amounts, may lead to not recovering the costs you spent for your client.
Here are three seemingly obvious financial rules that may be overlooked at your company.
1. Make sure you account for all streams of recoverable costs. When you add a new vendor or new venue, do you immediately add them to your recoverable cost capture and billing process? Who will remember to do it later, and will it be too late?
2. Appreciate the link between billing costs and posting AR. Timely and correctly posting reimbursements from your clients allow you to reconcile what is not paid. With some clients restricting when costs need to be billed, you need enough time to rebill or send supporting documentation to get your money recovered.
3. Understand the profitability of your clients. Time is money, both in the effort to collect it and the opportunity cost of not having it in hand. The cost of servicing a client includes the cost of carry for unreimbursed costs. Examining slow-paying clients can identify opportunities of improvement in internal billing processes or topics for discussion with your client on ways to expedite payments.
Leveraging Provana’s finance and accounting services can help. We can ensure costs are timely posted, invoices are sent, and reimbursements are posted and reconciled. Using Provana reduces the dependency on other competing priorities of your staff. We offer flexible capacity to meet your fluctuating demands, avoiding the need to staff for peak periods.
Each month, Provana processes more than 7,500 cost postings, posts close to 9,000 client reimbursements, and works with e-filing venues across more than 30 states.