New Credit Card Enhancement

Most distributors have customers who say something like “Keep my card on file and pay these invoices when I tell you” or “Keep my card on file and pay cylinder rent each month.” If you do this for your customers, then you know how time consuming it can be to process each card individually and then post the payments to their account. An upcoming credit card enhancement will make this part of your payment processing much easier.

The new program will feature an option to identify whether or not a customer wants regular and/or cylinder rent automatically paid with a credit card. When you run the payment program, it will check the customer file and will pay all the open invoices automatically. This includes getting the approval code from the card processor and then creating the cash receipts entry for the paid invoices. The operator doesn't have to request approval on each card nor do they have to create the cash receipt payment.

If your customer wants to pay by credit card, but they want to tell you which invoices to pay, a list of unpaid invoices will display on the screen. You simply check off the invoices they want to pay and then the program does the rest.

Have questions? Let us know by sending us an email

Accounts Payable Controls

Most businesses understand the need for balancing controls with Accounts Receivable and have implemented the appropriate controls. We have seen in many cases however, where the same controls do not exist for Accounts Payable. The reasons are varied, but the same controls still need to exist. When no controls exist invoices can be entered twice and vendors paid multiple times or paid the wrong amount. Each mistake takes time, and in turn money, to correct.

Here are a few suggestions for implementing Accounts Payable Controls:

1. Minimize the number of people involved. A company may be large and perhaps need a number of people to handle all of the invoices, but the process still needs to be focused. One person who really understands the task is going to do a better job than two people who kind of understand the task.

2. Separate the Accounts Payable invoice entry from the Purchasing function. This will be impacted by the size of your company, but It's still good from a control stand point to separate this process.

3. Run Totals. When the process is started, run a total on the number of invoices that will be entered and the total amount of those invoices. Balance these two numbers against the purchase journal after the invoices have been entered into the system.

4. Use the actual Invoice Number whenever possible. This will help to keep duplicate numbers out of the system. If there is no invoice number, for instance a credit card statement, then it's it a good idea to date stamp the invoice number. This may look like Visa20140714. 

5. Check-Off the Invoices. Always mark invoices as Entered after they have been processed into the system. Whether a paper file is maintained or the invoices are scanned and stored digitally, this can help provide proof that the invoices have been entered.

6. Look for the Abnormalities. When the Purchase Journal is run, learn to look for the abnormal conditions. This means that if there is typically a $100 a month charge from a vendor and now there's an invoice for $10,000, there may have been a mistake made. This is one of the main reasons to run a total on the amount of the invoices. It's also another reason to restrict the number of people involved in this process. After a while, an experienced person will recognize the abnormal situations and be able to make changes as needed.

7. Check the Work. Always double check the work. It is easier to correct a mistake before everything is processed and it takes a lot less time.


Minimize the number of people involved, run a total on the number of invoices and the total amount of those invoices, always use the vendor invoice number when available, compare your total to the purchase journal and double check all the work.

Our Top Ten List

There are a more than a few top 10 lists floating around these days. Finding one of those lists of 10 things to work on, steps to take, or simply funny anecdotes requires nothing more than a Google search. A customer of ours asked for some enhancements to the reporting functions within our software and what became of those enhancements was our very own Top 10 list of nine items. I know, why couldn’t it be ten and ten? What follows is that very list which we thought would be helpful to both our customers and non-customers. Even if you’re not using our software, knowing the following numbers about your company could be very beneficial to daily operations and management.

 Here are the nine top ten reports that were developed:

  1. Dead Stock: This report shows the Top 10 items in inventory that are considered Dead Stock. Companies qualify items as dead stock with different metrics, but they we qualify an item(s) as Dead Stock is when less than ten dollars of a particular item was sold in the last year. If the item isn’t selling, maybe it should be removed from inventory to free up room for items that are selling faster. Better inventory management starts here.
  2. Gross Profit: This report was designed to paint a more positive picture by showing the Top 10 inventory items that generated the most Gross Profit last month. These items are not only profitable, but are selling regularly.
  3. Monthly Inventory Activity: This report displays inventory based on how much activity is generated on each item. Therefore it shows the Top 10 items that generated the most activity during the month.
  4. Sales Analysis: Knowing who the best customers are is very important. Each sales person can quickly see to which customers they need to be devoting the most attention. This report also gives management the ability to see if the sales team is staying in touch with their customers.  
  5. Gross Profit Analysis: Sales are important, but how profitable are your customers? With this report anyone who has access can quickly see the Top 10 most profitable customers by sales person or location.
  6. Cylinder Balances: Part of our software is used to track cylinders in various different scenarios. Regardless of the asset, knowing which customer has which asset and how many they have is very important. The report we designed helps our customers to easily see the Top 10 customers who have the most cylinders (assets) on hand by sales person or location.
  7. Cylinder Activity: Another way of looking at cylinder (asset) customers is to see how many cylinders (assets) they are being shipped each month. This Top 10 report shows the Top 10 Cylinder (asset) customers based on how many cylinders (assets) were shipped to them or picked up. Customers with a sudden increase in activity would show up on this list.
  8. Invoices Over 60 Days Old: It’s important to sell and to make a profit, but money has to be collected. When time is limited and only a few collection calls can be made, make them to the customers who owe the most money. That is exactly what is on this report. It shows the Top 10 customers with the highest balances that are sixty days and older, the last time they paid, and how much they paid.
  9. Total Amount Owed: This report gives a slightly different picture of how much customers owe. With this report, you can see the Top 10 Customers that owe the most money regardless of how old an invoice is.

This Top 10 list will give a quick, efficient look at some key areas of your business. Regardless of the number, we chose 10, but you could choose 100, having an idea of what these numbers are will give your team clear defined areas to work on. Now go create some reports!

Let customers do the work

Paperless invoices and online payments
Running a business efficiently and productively in good times will be even more beneficial when the economy is slow. The two key words in that sentence are efficiently and productively. The past few years have taught us the importance of doing more with less. Below are few ways to get more work done with less effort.

Paper No More
First, stop mailing out paper invoices. Paper invoices are kind of like VHS tapes. There was a time and a place for them, but there are more efficient ways of delivering your invoices, like email. I know, I’ve heard it before: customers don’t want e-mailed invoices. I am sure some customers fall into that category, but not all of them. Remember, there is an entire generation of iPhone users taking over businesses and they don’t want paper. 

As the possibility of e-mailing invoices is considered, think of all the associated costs with paper invoices: paper, printer ink, envelopes, people to put invoices into the envelope, and postage to mail the invoices. For every thousand invoices sent out each month, a company is likely to be spending a minimum of $500.

Put the Customers to Work
Let the customers do all the work by paying their invoices online. Most major companies encouraging customers to pay their bills online. Why? Because that means the workload is now carried by the customer. They don’t have to receive the check, mark the account number on it, send it to accounts receivable for posting, and then carry the checks to the bank for deposit. The customer service angle is great, because now the customers can pay their bills when it is convenient for them. The smaller the customer, the more they will like this feature, because a smaller customers could go home, eat supper and then sit down and pay the bill online. To make it even easier for them, a link can be put in the e-mail when the invoices are sent. They simply have to click on the link, which will take them directly to the online payment system. 

Keeping Transactions Secure
To accept online payments, there must be a merchant account and the appropriate web software that allows for the payments to be accepted. The merchant account would handle the security issues, such as the liability of handling and storing credit card information.

Note: The distributor will need a secure certificate, this will appear as a lock on the website.

The merchant account would approve the requests for payment. At that point, the approval amount, approval number and the invoices being paid will be sent to the distributor via e-mail. 

From a security standpoint, the distributor never sees the credit card, therefore payment will be confirmed by the approval number. Because of federal regulations, distributors must be extremely careful with credit card information. There should be no need to upgrade the host software, given that many online payment applications are web-based.  

This article originally appeared in the Second Quarter, Spring 2011 issue of Welding & Gases Today Copyright ©Data Key Communications, Inc. All rights reserved.