Same-day invoicing: cash flow is a paperwork-latency problem

Ask a stockholder how long their customers take to pay and you get a number. Thirty days, forty-five, "longer than they should".

Ask how long it takes to raise the invoice after the steel is delivered and you usually get a pause.

That pause is the point of this article. Most of the cash-flow conversation in this trade is about the back end: chasing, credit limits, the customer who always pays on day 58. Far less is said about the front end, the days between the material arriving on site and the invoice existing at all. Those days are yours to fix, and nobody else is going to fix them for you.

Where the days go

Follow a typical delivery through a typical office.

The driver drops the load at 11am. The customer's storeman signs the delivery note. The signed copy goes into the cab door pocket. The driver does three more drops and gets back at 4pm. The paperwork goes into a tray.

Tomorrow, someone in the office works through the tray. They find the order, check the signed copy against what was sent, and note any shortage or damage. If the order was sold on actual weight, they check the weight is confirmed. Then they raise the invoice. Maybe. If it is a busy day, the tray waits. If the POD is missing, it waits longer. If the delivery note was signed with a note scrawled in the margin, it waits until someone rings the customer.

None of this is anyone's fault. It is just a chain with a lot of hand-offs, and each one adds a day. Two to five working days is common. Some firms still batch invoices weekly. A few still invoice at month end.

What the gap costs

Take a stockholder turning over £4.8 million a year. That is about £13,000 of sales a calendar day.

If the average gap between delivery and invoice is a week, there is roughly £92,000 sitting in the business that should already be on its way back. On an 8% overdraft that is around £7,400 a year in interest, before you count the extra working capital you could have put into stock.

The customer has not paid late. They have paid exactly on terms. Your terms simply started a week after they should have.

Month-end terms make it worse

Plenty of the trade sells on 30 days end of month. On those terms one day of delay can cost you a whole month.

Deliver on 31 October and invoice the same day, and payment is due at the end of November. Invoice it on 1 November, because the tray was full on Friday, and payment is due at the end of December.

Same steel. Same customer. Same terms. Thirty extra days of credit given away by a paperwork queue.

Why chasing harder does not fix it

When cash is tight the instinct is to tighten credit control. Shorter reminder intervals. Firmer phone calls. A stop on the slow payers.

All of that is worth doing. But credit control only works on invoices that exist. It cannot chase a delivery that has not been billed yet. If the leak is between the POD and the invoice, a sharper dunning ladder is chasing the wrong end of the chain.

There is a second cost, too. An invoice raised a week after delivery is more likely to be queried. The customer's goods-in has moved on. The storeman who signed has forgotten. A query on a late invoice adds another week.

Fix the chain, not the people

Same-day invoicing is not about working faster. It is about removing the hand-offs that make the gap.

Three things have to be true.

1. The proof of delivery has to come back immediately. Not in the cab door. Not tomorrow. Captured at the door and in the system before the lorry leaves the customer's yard.
2. Problems have to be recorded at the door. A short or a damaged bundle needs to be on the record at the point of delivery, so the office can tell a clean POD from one that needs attention without phoning anyone.
3. The invoice basis has to be settled before despatch. Theoretical or actual weight, the price, carriage, any alloy surcharge. If those are decided when the order is taken, there is nothing left to work out when the POD lands.

When all three are true, a clean delivery needs no human decision to bill. Only the exceptions do. Your office stops processing every delivery and starts handling the few that went wrong.

How MetlSys handles it

This is how I built the despatch-to-invoice chain in MetlSys, because I watched offices lose days to exactly this.

The driver, or the customer, opens a single-use ePOD link on their phone. It captures the signature on the glass and any exceptions, such as shortages or damage. The signature is printed on the delivery note itself, so the copy you file, email or share is the proof of delivery.

A clean POD can trigger the invoice automatically. Invoices raise from the delivery note on theoretical or actual weight, whichever the order specified, and you can still raise them singly or in bulk if you prefer to look first. Billable carriage and itemised alloy surcharge ride the order through to the invoice, so they are not added by hand afterwards.

For the ones that do not go cleanly, the delivery notes list counts what is waiting for proof of delivery, what has a delivery exception and what is waiting to be invoiced. The invoices list has a short queue of delivered but not invoiced. So the gap is visible every morning, not discovered at month end.

Invoicing sits on the Professional and Corporate tiers. The detail is on the financial integration section of the features page.

There is no judgement call hidden in software here. A clean POD is a signature with no exceptions recorded. Anything else stays on the list for a person to deal with.

A test for Monday

Pull your last twenty deliveries. For each one, note the delivery date and the invoice date. Work out the average gap in days.

If it is zero or one, you are ahead of most of the trade. If it is three or more, multiply that by your daily sales figure. That is the money your paperwork is holding.

Then look at which step is slowest. In most offices it is not the invoice. It is the POD getting back to the desk.

If you want to see a delivery go from signature to invoice on your own kind of order, request a demo.