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It’s no secret that customers don’t like surprises, at least not when unpleasant. So, it shouldn’t come as a revelation that customers don’t like to see inaccuracies in the invoices they receive, yet it happens far too often. It doesn’t matter whether it’s an extra charge on a dinner bill, an unexpected service charge for an auto repair or an invoice for more items than were ordered. Big or small, customers hate inaccurate invoices. I know I loathe them.

On the flip side, inaccurate invoicing creates all sorts of problem for whatever entity presented the invoice. Shipped 20 units but billed for 10? Lost revenue. Didn’t get the invoice out in a timely manner? Days sales outstanding suffer. Never billed the customer? More lost revenue. Complicated invoice? Confused customer. Overcharged? Angry customer.

The results of inaccurate invoicing are burdensome. Poor invoicing practices can lead to lower customer satisfaction, a damaged business reputation, lost customers and lower market share. It can also decrease productivity while increasing sales cycles and sales costs.

Inaccurate invoicing presents financial, reputational and potentially legal consequences. It can lead to delays in getting payments from customers, which will have a negative impact on cash flow and the ability of the business to meet its financial obligations. Disputes and chargebacks can be time-consuming and costly to resolve. Inaccurate invoicing can lead to lost revenue and profits, as a business may not be able to bill for all the products or services it has provided. Inaccurate invoicing can lead to compliance issues, particularly for businesses that are required to comply with specific regulations, such as sales or value-added taxes. It makes it harder to accurately report on cash flow, which makes it difficult for a business to make informed decisions. Inaccurate invoicing can lead to legal woes if customers or regulatory bodies decide to act against a business. And it can damage the reputation of a business, as customers may view it as unprofessional and untrustworthy.

I’m going to spend the next few paragraphs looking at the economic impact of inaccurate invoicing and then spend some time explaining more about how this affects customer satisfaction, so bear with me.

In its recent report The Total Economic Impact™ of Sage Intacct, Forrester quantified the impact of accurate customer billing on a company’s margin. Let’s walk through the methodology it used to produce a real dollar figure.

Forrester interviewed four customers with experience using Sage Intacct, aggregated the interviewees’ experiences and then combined the results into a single composite organization, a technology services company, headquartered in North America with global operations. The composite generates $30 million in annual revenue, has 100 employees, and grows 20% annually via acquisitions during the three-year TEI analysis period.

The four interviewed organizations said that, prior to Sage Intacct, their accounting and financial systems were disjointed, complex and problematic. The financial processes resided across multiple platforms, such as enterprise legacy systems, bookkeeping software, spreadsheets and other applications. These systems included QuickBooks and Oracle NetSuite.

Due to lack of system consolidation and automation, the organizations used laborious manual processes to bridge data gaps, often requiring additional labor to perform maintenance tasks, such as replicating the data in prior legacy and third-party software solutions or tracking contracts and invoices in individual spreadsheets.

After the investment in Sage Intacct, the interviewees acquired visibility into their organizations’ financial performance and had confidence in their numbers due to the platform’s real-time data. They gained financial insights and the ability to slice and dice the data, drill down on numbers and isolate any issues with a particular number, none of which was possible in their previous environments.

As a result, Forrester calculated a $737,100 total three-year margin benefit gained due to more accurate customer invoicing, with a present value of $604,001. Let’s look at the details.

Evidence and Data

Prior to deploying Sage Intacct, the interviewees failed to renew several contracts and bill customers due to fragmentation in their systems, and sales orders didn’t require corresponding purchase orders. This lack of organizational cohesiveness led to missed revenue because customers were never invoiced or their contracts weren’t renewed, even though they received continued access to services. Sage Intacct ensures the creation of a sales order and purchase order at the same time, providing additional visibility into customer status and ongoing engagement.

The lack of agility and integration of their prior solutions with their other systems, such as sales, banking and external third-party CRM solutions (such as Salesforce), was an issue. They found their systems didn’t communicate effectively, so they had to enter the customer data into two solutions simultaneously to create a full picture, which was not comprehensive or accurate. With their double-digit growth, this duplication wasn’t sustainable and created blind spots as well as an incomplete and inaccurate data environment that led to unrealized revenue.

For example, when consultants didn’t find a specific customer in the system, instead of adding the customer, they categorized their hours as other or nonbillable, which would then become an absorbed expense without associated revenue. With Sage Intacct’s advanced integration with their third-party CRM, the consultants got full visibility into their customer’s status and easily located them to bill. As well, salespeople created an invoice in their CRM solution that became a sales order in Sage Intacct. The accounting team then took over, converted the order to an invoice, and sent it out to the customer.

The CFO at an ERP consultancy stated, “When they go into the contract in CRM and add an opportunity, it automatically creates an entry in Sage Intacct that’s connected to that contract.” This advanced integration created a one-stop shop and enabled interviewees to transfer more control to sales representatives, making sales team members’ jobs easier and lives happier.

Modeling and Assumptions

Based on the customer interviews, Forrester estimates the following for the composite organization:

  • The composite migrates from an enterprise legacy solution, experiences 20% annual growth, and employs a sales team of 20 people
  • With Sage Intacct, the sales team has greater visibility into customer status and contract detail, such as invoices that are outstanding, paid, on hold and in collection, enabling the team to capture an additional 5% incremental revenue.
  • Comprehensive integration of other sales-related third-party solutions such as CRM enables the sales team to focus on more accurate invoicing rather than duplicate data entry.


According to Forrester, the realization of this benefit will vary with:

  • The prior ERP system of the organization and its level of integration with third-party CRM solutions.
  • The average annual revenue, percentage growth and overall gross margin efficiency.
  • The size of the sales team.

To account for these risks, Forrester adjusted the benefit downward by 10%, yielding a three-year risk-adjusted total present value of $604,001.

In its report, Forrester determined the quantifiable benefits as related to margins. So, let’s spend some time discussing customer satisfaction, specifically looking at cash flow challenges caused by lower margins.

Poor cash flow can negatively affect customer satisfaction in a variety of ways. For example, if a business is struggling with cash flow, it may not be able to afford to purchase sufficient inventory or maintain equipment, which can lead to stockouts or long wait times for products and services. Additionally, a business with poor cash flow may not be able to afford to provide adequate customer service, which can lead to frustrated and unhappy customers. In extreme cases, a business with poor cash flow may not be able to pay its bills, which can result in service disruptions and further dissatisfaction among customers.

Further, imagine the impact on a customer who’s looking to place an order. With poor cash flow, it’s much harder for a company to respond to customer inquiries since many companies decrease inventory levels to improve their working capital ratio. When there’s not enough cash on hand, you might see the company missing customer commitments. The organization won’t have what it needs to react to market changes or to capture new opportunities. The company won’t be able to maximize its revenue.

When these situations occur, the company will lose market share and its competitive position. Customer satisfaction will decrease as it’s more difficult to meet customer demands and commitments, and its net promoter score will plummet. Revenue and growth opportunities will evaporate. Margins will tumble. It’s no wonder that most company bankruptcies are a result of a low working capital ratio, and in part it can be traced back to lost margin due to inaccurate billing.

Inaccurate billing creates customer frustration, dissatisfaction, confusion and mistrust, as well as lower margins. Conversely, prompt and accurate billing helps companies maintain and grow their customer base since they can better manage a demand-based inventory. Customer communication is enhanced as there are no billing surprises, and the company is perceived as easy-to-do-business-with. And let’s not forget the $604,001 added to the bottom line of the Forrester composite company. That’s real tangible value.

If you’d like more information on The Total Economic Impact™ of Sage Intacct from Forrester, I invite you to follow this link where the analysts not only explore the impact of more accurate customer billing, but also examine the impacts of:

  • Automation and integration
  • Sales team effectiveness
  • Increased accounting team productivity and reporting compliance
  • Increased finance team efficiency and auditability

All told, these benefits add up to $2.1 million and a return on investment of 441%. Worth a look.

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