Credit notes every month end
The invoice run goes out on a Friday. By Tuesday the queries start. A contractor was charged for three days when the excavator was broken down waiting for a fitter. Another was charged a full week when the machine was off-hired on the Wednesday. A third was charged the standard rate instead of the rate the rep agreed. Each query means pulling notes, checking with the depot and raising a credit note.
The customers who query are the careful ones. You wonder about the ones who just pay, and the ones who stop paying anything until every query is settled.
Where hire charges go wrong
Hire charging has more moving parts than most invoicing. The hire system applies the rules, but only to the information it has.
| Error | Usual cause |
|---|---|
| Charged after off-hire | Off-hire keyed late or with the wrong date |
| Charged during breakdown | Breakdown not recorded against the hire |
| Wrong rate | Agreed rate not entered, or entered on the wrong line |
| Part week charged as full | Rate rules applied inconsistently |
| Missing charges | Transport, fuel or damage not added |
| Duplicate lines | Exchange of machine recorded as a new hire |
How breakdown days and part weeks are charged depends on your terms. The check applies your rules; it doesn't set them.
What the errors cost
Credit notes and the admin behind them. Payment delays, because customers hold whole invoices while one line is queried. Missing charges that are never added. And a reputation with customers' accounts teams as the hire company whose invoices always need checking, which slows every payment.
Errors also land on the hire desk at the worst time. The first week of the month, when new hires are being booked and machines are going out, is when the queries arrive. Staff who should be dealing with customers who want machines are instead reconstructing what happened on a hire that ended weeks ago, from notes that were never meant to be evidence.
Checks before every invoice run
- Before the run, every hire due to be invoiced is read from your hire system with its dates, rates and lines.
- Off-hire dates are compared with the off-hire log, so late-keyed off-hires are spotted.
- Breakdown records from the workshop and callout log are compared with hire dates, and days the machine was out of action are flagged under your terms.
- Rates are compared with agreed customer rates and your rate card, and anything different is flagged.
- Transport, fuel and damage records are checked for charges not yet on the invoice.
- A check list shows each likely error with the evidence, for the hire desk to fix in the hire system before the run is released.
The check runs on your existing hire system data plus the logs around it. Nothing is changed without a person agreeing.
Month end afterwards
The invoice run goes out after a short, specific list has been worked through. Fewer queries come back, and those that do are genuine disagreements rather than errors. Missing charges are added before the invoice leaves. Credit control spends time collecting rather than correcting.
Does this sound like your invoice run?
- Credit notes are a normal part of every month end.
- Breakdown days are credited only when the customer complains.
- Off-hires keyed late lead to overcharges.
- Agreed rates are not always the ones invoiced.
- Transport and fuel charges are sometimes missed.