In times of economic distress, business owners often begin contemplating the dreaded 'L' word -- layoffs.
But are they really an effective cost-saving measure? Probably not, says Lynn David McAninch of Competitive Edge Associates, a management resource firm located in Orville.
According to McAninch's figures, personnel costs represent only 7 percent to 10 percent of the tab of running the typical manufacturing plant. The real savings, he asserts, can be found in reducing overhead and materials, which often account for as much as 30 percent and 60 percent of costs, respectively.
"If you lay people off, it's a discouragement to the people that remain," McAninch says. "They have their own jobs to do plus those of the other people. They don't go away."
Instead of cutting the number of workers, McAninch suggests teaching employees to cut overhead and material costs by sending them through the Lean Simulation Machine, an interactive five-hour class developed by retired Toyota executives for the Donnelly Corp., an automotive parts manufacturer in Holland, Mich., and subsequently used by the likes of General Motors. A group of up to 10 workers, ideally of mix of top executives, managers and front-line workers, sits down for a lecture on continuously improving the manufacturing process.
They then participate in a four-step simulation that involves producing a "product" -- in this case, a metal bar to which two nuts and bolts have been added, which is then painted and heat-treated.
"Most workers learn better hands-on than they do just listening to a lecture," McAninch says. "We do a combination."
Five group members participate in the simulated manufacturing process, which is not laid out in the most efficient manner. One functions as a forklift driver -- the only person who can move materials --while two act as efficiency experts, who make suggestions on how to improve the process after every 5-minute week.
A "lean" principal is then discussed, and the group is allowed to make two changes to the process. The goal is to gradually eliminate activities that don't add value to the product -- for example, moving materials more than absolutely necessary or taking unnecessary steps to retrieve them; double-handling things; doing things twice because they weren't done right the first time; having downtime on the line because materials aren't available or machinery isn't functioning; or storing finished goods that ideally should be shipped right off the line to the customer.
"Most companies, if they really analyze their products, will find that only 10 percent of their time is spent in value-added activity," McAninch says. "Ninety percent is spent in nonvalue-added activity. You'll never get it down to just the opposite, but that's the goal."
He stresses there is no right or wrong way to reconfigure the simulation process.
"Every group does it a little bit differently. That's part of the learning curve."
McAninch likes to take groups back to the workplace within 48 hours of completing the class and ask them to apply the principles they've learned to a real-life situation. While positions often disappear in the simulation, most companies who put employees in the classes commit to not cutting anyone's job as a result of it.
"Generally, lean done right does not eliminate people," he says. "But the position that you have right now may not be there any longer, and you'll be retrained in another area." How to reach: Competitive Edge Associates, (330) 683-3431
Lynne Thompson is a free-lance writer and regular contributor to SBN Magazine.
If you are an IT manager, you're probably thinking of the capital that's been invested in the hardware and software your company needs to get things done. That's a good guess, but it's not the answer. I'm thinking about human capital, defined as the value good people bring to good companies.
Your most valuable IT asset is your IT staff. Your company may have spent millions on hardware and software, but it takes the IT staff to implement it, maintain it, update it and navigate through never-ending changes in technology. Your IT staff is your most valuable IT asset, and they should be treated as such.
The benefit you benefit from
Each year, ComputerWorld magazine produces a list of the 100 best places for IT professionals to work. This year's list is out, and it includes benefits and working conditions cited by IT professionals as essential for companies wanting to attract and hold the best IT talent.
Taken by nearly 17,000 IT employees working at the 100 best companies, the survey put health insurance and vacation at the top of the list, followed by investment in technology, flexible schedules and training.
The results show that employees value training almost as highly as hard benefits such as vacation time and health insurance. The best of these best companies have taken these results to heart -- 49 percent plan to increase their training budgets next year.
Even in the best economic times, IT budgets are stretched thin. Training is sacrificed, which is a shame because companies that don't invest in training end up with employees who lack the skills they need to move the company forward. A recent report in a British professional journal reported that London businesses are failing to provide vital training and development.
Of the 130,000 employers in London, less than half have training plans in place and even less have a training budget.
Making the most of it
When your IT budget does provide funds for training, several things can be done to maximize your return on investment. Start by making sure your employees go to training with the highest expectation for success. Request a syllabus so you know what topics will be covered, then make sure your employees have the skills they need to succeed in the classroom.
After employees return from training, guard against "training atrophy." This happens when employees are sent for training, then never get to utilize the knowledge once they return to the workplace. Usually it happens because training is scheduled too far in advance of the projected need.
When there is a large gap between the training and the actual project, schedule practice time weekly or daily so the skills learned can be practiced or reviewed. Because heavy demands are often placed on IT employees to meet deadlines and satisfy impatient end-users, this takes a strong-willed IT manager to implement.
Another way to prevent training atrophy is to plan not only for training but also for timely software upgrades so that training and software upgrades coincide. Ensure that the versions of hardware and software your employees have used during training are the same ones they will use when they return to work. Far too many students have told me that they won't have access to the version of software that we have just spent a week training them to use.
Treat employees' time away as if they were unreachable. Don't bother them with work responsibilities when they are trying to soak up valuable knowledge for your company's benefit. Instruct employees to remember that they are on a mission for your company. They should be prepared to train each day, and get the rest they need to be attentive during the sessions.
IT employees want to provide value to their company, but they also want to feel valued. Investing in the training they need is the best vote of confidence you can give them.
It has immediate benefits for your employees and for your company as you both move forward with an ability to understand, implement and profit from new technologies. Bruce Thompson is manager of education services for BravePoint, a supplier of e-business and enterprise IT solutions to mid-market companies. Reach him at (770) 449-9696, ext. 3034.
In 1998, Robert Miller decided it was time he registered the name of his familys then 4-year-old store with the U.S. Patent and Trademark Office.
The manager of Thinker Toys, an educational toy store located in Fairlawns West Market Plaza, envisioned at one point starting a mail-order Web site, and he knew the move would take the store name into areas far beyond its sole west Akron location areas where other entrepreneurs might adopt the catchy moniker as their own.
As it turned out, someone already had.
Local intellectual property attorney Roger Emerson discovered the proprietors of a California toy store had beat his client to the punch by submitting an application to register the same name a mere two months earlier. Common law, he explained to Miller, entitled the family to use the name in the Akron area and, if it was found they had used it on their Web site before the California counterpart, in the rest of the country as well.
Trademark rights are based on who used the trademark first and, secondly, in which geographic location the trademark was used, Emerson says.
Theres even a 5-year period between the time a registration is issued and the time its deemed incontestable, when anyone believing they have a claim to the name in question can petition to have the registration canceled.
In the end, the family contented itself with retaining the rights to the Thinker Toys name in the Akron area alone.
We just decided it was easiest to leave it at that just because of the expense, Miller, now 25, says. Roger was very straightforward about it, that this was not going to be an inexpensive [thing] for us to do.
The cost of going to court, he adds, could well have put the toy store out of business.
The problem is a growing one, thanks in part to the Internet explosion. Businesses with identical or similar names that once operated within different geographic areas, blissfully unaware of one another because of the miles that separated them, are now bumping into each other in cyberspace.
Once you hang your page up on the World Wide Web, you no longer have little strip mall jurisdictions, says John Garred, an intellectual property and patent lawyer at Arter & Hadden in Cleveland. You have broadcast that trademark to virtually everybody in the world.
Problem can often be avoided by researching and registering a trade name (the name by which a business is known), trademark (a word, symbol or slogan identifying a good or service), and/or domain name (commonly known as a Web site address) with the U.S. Patent and Trademark Office and securing rights to it, preferably before going into business.
Most people think of a name they like for their store or for their product, and they just adopt it, Emerson says. They dont do any checking at all to see if its available.
Business owners can do the work themselves by logging onto the U.S. Patent and Trademark Offices Web site at www.uspto.gov, where visitors can access the offices database to see if the trade name, trademark or domain name in which theyre interested is available. It also allows them to fill out an application to register it online. (Registration packets can also be obtained by calling the Trademark Assistance Center at (703) 308-9200.)
Garred suggests amateur sleuths also check local trade directories, telephone books, Yellow Pages, and other resources to make sure the name theyre considering isnt already being used by someone who hasnt registered it.
According to Jessie Marshall, an attorney adviser in the Arlington, Va., office of the U.S. commissioner for trademarks, the federal government charges $325 to file an application. It takes four to five months for an examining attorney to review the application.
Emerson does the job for $850 $250 to do the research and prepare an availability opinion and $600 to prepare and file an application a price he regards as standard in the area. He allows that most people can conduct an adequate search of the trademark and patent offices Web site database on their own; in fact, he highly recommends doing a self-search to those who cannot afford a professionals services.
However, he points out that most people do not have access to all the databases, some of which require a membership or fee, that he and other attorneys use. And Marshall says private search firms peruse state records, corporate filings, any kind of commercial listing they can.
Emerson believes many people do not have the knowledge and experience to interpret their results for example, whether the name chosen for a new business or product is too similar to an already-registered counterpart for legal comfort.
Thats usually where the attorney is providing the value, he says.
He refuses to interpret information submitted by clients, mainly because he fears it is incomplete.
For those who can only afford to register one item, Garred suggests registering the name of the main product or service in block letters with a thorough description of basic goods and services. He explains that logos and slogans come and go and, in many cases, consumers are infinitely more familiar with the name of a product or service than that of its manufacturer or provider.
Also at the top of the to-register list is the domain name, along with any common misspellings. It is far more expensive to obtain a domain name already registered by someone else, he points out, than simply registering it first. And the sooner a business starts a Web site with that domain name, the better.
Business owners with cash to spare may want to consider registering what Garred refers to as pejorative alternates to the domain name. Common examples include yourdomainnamesucks.com and yourdomainnameblows.com.
Its not unusual for someone to post a whole Web page as to why your products so horrible, he says. It happens all the time.
Marshall stresses that the U.S. Patent and Trademark Office does not dispense legal advice or wield enforcement powers. It is up to the owner of the registration to police and take action against anyone who uses his/her property. But she calls the federal registration a huge piece of ammunition in the fight to defend ones right to a name or mark.
A cease-and-desist letter to a later user saying, I have a federal registration for this mark, so back off, means a lot more than, I used it before you, she says.
How to reach: Thinker Toys, (330) 665-3860; Roger Emerson, (330) 535-9999
Tom Rice admits that one of the more difficult things he's done in his life is to name a successor for Rice's Nursery, a retail garden center, gift shop and design/build/landscape concern located on 35 acres in North Canton.
It wasn't that he balked at the idea of turning the day-to-day operations over to someone else. The 58-year-old CEO was perfectly happy to be out of the office and running one of the nursery's three Stark County farms, a 90-acre spread he bought four years ago to produce shade and ornamental trees. Furthermore, he realized it was high time sons Bryan, a 34-year-old horticulturist, and Kevin, a 33-year-old state-registered landscape architect, learn how to manage the business and its 120 employees.
"I found out a long time ago that as long as you're doing it, everybody will stand back and watch you do it," Tom says in a matter-of-fact tone.
The hard part was choosing one of his sons, both hard-working Ohio State University graduates, to head the family business.
"Making Bryan president was tough because the boys are just a year and five days apart," Tom says. "They're so close in age. But Bryan's really a leader. Kevin's a little more quiet, a little more laid back."
Tough is a word Bryan also uses, in his case to describe the role he assumed in January after working at the nursery for 10 years.
"The changing of the guard, if you will, has not been as easy as I thought it was going to be," he confesses.
The spring and summer of 2000, for one thing, have proved to be incredibly soggy. Bryan recently sent letters to customers explaining that major rainfalls have put the nursery behind schedule in completing landscaping jobs.
"Working with Mother Nature is very, very challenging in itself," he says. "Mix in the family part of it, and that just adds a whole other realm of problems."
Bryan is candid in describing just what those problems are. He believes his father may not have been as ready to hand over the day-to-day operations of the nursery as he professed to be.
"There's a level of trust, but ... this was his baby," Bryan explains. "He still wants to be somewhat involved."
The result was that neither Bryan nor the nursery employees knew exactly who was in charge of what. The new president says that people went over his head to his father with problems and concerns instead of bringing them to him. The problem was remedied to some extent when Tom explained Bryan's role in a letter to employees and asked them to support him in his position.
But Bryan says he needs to do it verbally, too, and calls that clear definition of roles "one of the biggest things with a family business that needs to be done."
Bryan's new title has gotten him involved in landscape sales and production, which has resulted in "a little bit of a power struggle/ego thing" with his brother, who designs and sells landscape jobs for the business to install. Bryan describes Kevin as a tremendously gifted landscape architect who, like many artists, doesn't possess all the management skills needed in his position as vice president.
"A lot of artists won't recognize that or can't recognize that," Bryan says. "That's one of the issues that we're dealing with right now."
His solution is to pitch in and help.
"I'm hoping and praying he's receptive," Bryan says.
Kevin, for his part, says he's had no trouble working with his brother or his father since he left a Columbus landscape design firm and began working with them seven years ago.
"The dynamics of the business are unique," he says of the family firm. "But we tend to work well together, and we understand our chain of command."
Tom says he has relatively little experience with his sons' predicaments. By the time he purchased his father's small landscape business, J.D. Rice & Sons, when his father retired in 1970, his own brother was no longer involved. But he says his sons have their own areas of responsibility -- Bryan the "green-good buying" and garden center, Kevin the landscape business -- and work hard to resolve any differences they have.
"We've had our moments, believe me, but for the most part it's been very enjoyable," he says.
His advice to Bryan?
"I told him to just take it easy, and things will happen," Tom says. "He needs to gain everybody's respect."
The problems Bryan relates are not uncommon, according to Dennis Zaverl of Zaverl & Associates, a Peninsula-based consultant who has worked with family businesses for 30 years. He's not surprised to hear that Tom might have problems handing over the reins of the nursery. The fact that employees seek him out for answers to questions and problems is "a form of being needed, a form of flattery."
Zaverl does say, however, that Tom has done the most important thing he can do in facilitating his sons' success in their new roles -- physically remove himself from the nursery. The next step is to refer those employees who continue to come to him to the appropriate offspring.
"It's a very difficult thing to break that dependency," he acknowledges. "But he has to say to the people who are doing that, 'Look, I like you. We've had a good relationship over the years. But I can't answer that, and I can't get involved in that. That's not the succession plan.'"
Zaverl agrees with Bryan that it might be helpful for Tom to have a succession talk with nursery employees. He says it's normal for some employees not to take the new arrangements set forth on paper seriously, especially in what Zaverl calls "a family atmosphere with nonfamily employees."
"You know how families are -- nobody pays attention to mom or whoever is beating on them all the time," he says with a chuckle.
The succession talk doesn't have to be an elaborate speech. Something simple will suffice, such as "Johnny's taken over the company. From this point on, all decisions in these particular areas will be made by him. Furthermore, these are the only activities that I will be dealing with."
To ease any tension between Bryan and Kevin, Zaverl suggests Tom put the emphasis on each man's respective responsibilities instead of on their titles, both when dealing with them individually and when presenting them to employees in the succession talk. Doing so, he explains, reduces the potential for breeding resentment.
"You go back to the division (of labor), a little bit like the Japanese culture," he says. "So the guy's the president. Big deal. He's just another worker."
Putting the emphasis on responsibility rather than titles, Zaverl adds, makes it easier to hold each son accountable for his actions.
"You let the accountability surface, whether it's at a weekly meeting or somewhere else," he says. "If one is responsible for certain things and they're not working, it's a topic for discussion."
Having Tom present during these meetings as a mediator might be a good idea until Bryan and Kevin work through any issues they may have.
Bryan believes the challenges of recent months may not be bad for the company in the long run.
"I might look back at this at age 40 or 50 and say, 'That really made me strong, to deal with the issues to get us where we're at today.' Truthfully, it should make us a stronger business, to go through this."Lynne Thompson is a free-lance writer for SBN.
It's the kind of benefit employees are looking for -- a profit sharing/401(k) plan that effectively matches employee contributions dollar for dollar up to 4 percent of total employee compensation.
And the 77 employees at Digital Day, a Fairlawn-based provider of corporate Web solutions, have found it. Jacqueline Alt, manager of internal operations and human resources, doesn't think of the plan as a luxury. In fact, she considers it a necessity in today's top job market.
"In our industry, we have to be competitive for human resources," she says. "You have to have not only a 401(k) plan, but a really good one in place. The profit sharing plan is another major issue with the employees. They're looking for the best place to be."
Just how does a small business provide such perks? It's not as cost-prohibitive as it sounds, according to Mario Dolciato of Retirement Benefit Systems, an Akron-based company that specializes in designing, administering and investing retirement plans for smaller companies.
He says it's actually quite affordable to set up a retirement plan, and, in most cases, it is the employer who decides just how generous he or she will be, from matching employee contributions dollar for dollar to kicking in nothing at all.
"When we design the plan, we talk with a business owner and find out what they want out of a retirement plan," Dolciato says. "Every retirement plan out there is different. There are things that you can design in the plan to work for each company -- eligibility can be different, the vesting schedule can be different. If the business changes in the future, we amend the plan to allow other things to happen."
While plans differ from company to company, Dolciato says the most popular types of qualified retirement "products" offered by the IRS can be narrowed to the following. He explains exactly what they are, how they're set up, and what they cost to implement, fund and administer.
The S.I.M.P.L.E. IRA plan. Like the individual retirement account so many Americans are familiar with, this IRA allows an individual to defer and invest a portion of pre-tax income every year. However, an employee can sock away up to $6,000 a year -- three times the Internal Revenue Service's $2,000 limit for the Plain Jane IRA.
The catch? Each year the employer must match 3 percent of each participating worker's total annual compensation or 2 percent of every worker's total annual compensation, regardless of whether they contribute to their IRA or not. All contributions are vested immediately.
Dolciato says this is a good option for businesses with 10 or fewer employees. To set it up, employers need only contact a registered securities representative.
"There's no IRS reporting, no administration, no cost for administration," Dolciato adds.
Employees, who are able to choose the mutual funds in which they invest their money, pay an annual custodial fee of about $30 to the investment company, just as they would if they'd opened a regular IRA of their own.
The profit sharing/401(k) plan. Dolciato recommends the profit sharing/401(k) plan for businesses with more than 10 employees. The profit sharing component, as the name suggests, is funded by employer contributions only.
The plan document can be worded so that such contributions are made at the employer's discretion from one year to the next.
"The business owner can decide at the end of the year if they want to put $50,000 in, $100,000 in, or zero," Dolciato says.
Even if a business enjoys a year of record-breaking success, its owners may decide to contribute nothing.
The 401(k) component is made up of employee contributions and matches made by the employer. The IRS allows each employee to contribute a maximum of $10,500 pretax income annually (a figure indexed each year). A well-worded plan document allows the employer to make contributions at his or her discretion.
Some companies, like Digital Day, do commit to matching a percentage of employee contributions annually.
"But we like to make the document read, 'We'll put a match in if we'd like,'" he says.
Such wording prevents employers from making legally binding promises they can't afford to keep. And even if the employer decides to contribute nothing, the plan still offers employees the opportunity to defer and invest pretax income.
Retirement Benefit Systems charges a one-time fee of $800 to draw up a plan document. Annual administration charges are $1,100 plus $42 for each employee.
The rates, Dolciato says, are comparable with those of competitors. There are also investment costs, or fees charged by mutual funds, to consider. But setting up a profit-sharing/401(k) plan for larger groups allows a business to control how much it will contribute and when employees are vested for those contributions.
Employees, of course, are immediately vested for the balance produced by their own money, but a vesting schedule dictates when they're fully vested for employer contributions. Dolciato says workers are typically vested in 20 percent increments for each year of service and are fully vested after six or seven years.
The money purchase plan. A money purchase plan is a pension plan fully funded by the employer. Because it is a pension plan, it must be funded for an amount stipulated in the plan document.
"If you write in your money purchase plan that you're going to put 10 percent (of an employee's total annual compensation) in for everyone, every year, then you're going to do it," Dolciato says.
Retirement Benefit Systems charges a one-time fee of $800 to draw up a plan document. Annual administration charges are $1,000 plus $32 for each employee. Dolciato says some competitors charge more to come on site and talk with employees so they can each invest their own funds. He says the money spent is worth it, for it releases the employer from the fiduciary liability inherent in what he calls pooled accounting, or putting the money in one pot of investments.
The employer is responsible for the funding only. How to reach: Retirement Benefit Systems, (330) 666-8883
"How we go in our local counties is how the state goes and how the nation goes," he says. "We are a pretty good representation of what's going on across the country."
Normally, there are 55 plans on an average day for members of the commercial construction industry association to check out. After the Sept. 11 terrorist attacks, that dropped to 20, and didn't improve for six months.
But Riffle says things are definitely looking up in the plan room. In March, the number of plans topped out at 65, the most there have ever been. When he logs onto the association's online plan room, he finds that 300 projects -- half of all those currently out for bid in Ohio -- are for $1 million or more.
"What I haven't seen here in the last six months that I'm seeing now -- in the last month, let's say -- are big projects," confirms Larry Thompson of Munroe Falls-based Thompson Electric Inc., one of the area's largest electrical contractors.
And according to Donzell Taylor, president and CEO of Fairlawn-based Welty Building Co., one of the area's largest general contractors and construction managers, there's a renewed sense of urgency to complete those projects, which is good for business.
"The year before last, when we got about 80 percent of the information we needed, we were being pushed to start and figure the rest of it out later," he says. "Last year, (customers) wanted all of the i's dotted, all the t's crossed, everything completely understood. And even when we got to that point, it was, 'Well, let's just think about this a little longer. Let's just wait and see what's going to happen.'"
Taylor and Thompson say many of the big projects are for institutions such as universities, hospitals and other health care facilities. Construction of elementary, middle and high schools "is really booming in the area, too, and it's going to continue to boom for the next couple of years."
Thompson mentions Medina County, where population growth has made building new public schools a necessity, and the city of Akron, where replacing aging schools is a state-mandated priority.
Riffle says light commercial projects -- strip malls, detached stores, offices, fast-food restaurants -- are also being built, many in distressed communities making a comeback.
"You need commercial services to support those areas," he says.
Conversely, Taylor has seen "a very severe drop off" in the construction of industrial facilities and warehouses.
Riffle estimates that 60 percent of new construction is "built for obsolescence," either in appearance or function. Institutional buildings usually have a longer useful life. But the use of high-end materials such as marble, terrazzo and solid cherry paneling to create landmark interiors is waning. Taylor says new structures also tend to be smaller.
"We are seeing most of our clients looking for a lower first cost on their buildings," Taylor says. "They want to put less bells and whistles in."
There are, of course, exceptions, such as an addition to the First Congregational Church of Hudson's 138-year-old sanctuary that Taylor's company recently completed. The structure not only matches the original Western Reserve architecture, it is endowed with extras such as 10-foot-high arched doors with large wood casings and detailed brickwork.
Riffle cites a new library to be built in Hudson, a community known for its well-preserved architecture, as an example.
"They are trying to design and build the library so that 300 years from now, not only will it still fit in with the community, but it will not be torn down," he says.
Structures in other communities are also being designed to complement their architectural surroundings. Riffle says a FirstMerit bank and a McDonald's restaurant in Barberton were modeled after the remaining barns built by O.C. Barber in the mid-1800s on his vast estate in the city he founded. Buildings in a new commercial area are being built in the same style.
How long will the building boom last?
"Next year, I think, will be better than this past year," Thompson says, "but I don't think it's going to be as good as what we've seen in the past." How to reach: The Builders Exchange of Akron, (330) 434-5165; Thompson Electric Inc., (330) 686-2300; Welty Building Co., (330) 867-2400
Although there are no laws that address how an invoice should be prepared, he and others believe an efficient, professional billing process can reduce the collection headaches and legal wrangling.
"Without billing discrepancies, good customers will quickly approve and pay your bill, while poor-paying customers usually pay creditors who appear more organized and thorough," says Brockman.
Brockman and two area lawyers list the hallmarks of good billing below.
1. Send an acknowledgement of each order received that spells out terms of payment.
"Sometimes a company will put on its invoice terms that may not have been discussed up front when the product was ordered," says Roger Stevenson, a partner at Roetzel & Andress, a full-service law firm headquartered in Akron.
The acknowledgement should clearly spell out the terms of payment, particularly the due date and any late charges that will be levied.
2. Require the customer to sign and return a copy of the acknowledgement or to acknowledge it in writing.
Marc Merklin, chairman of the commercial law practice group at Brouse & McDowell, a full-service business law firm headquartered in Akron, says a fair number of companies end up in disputes because the terms set forth in the fine print of the buyer's purchase order conflict with those set forth in the fine print of the seller's confirmation. Adding this step to the sales process helps prevent such problems from arising.
3. Itemize the products/services for which the customer is being billed. Stevenson uses the bills Roetzel & Andress sends to clients as an example.
"Because we're basically selling time and service, most clients want -- and most lawyers produce -- fairly itemized descriptions of what they did, who did it and how much time it took," he says.
Merklin points out that bills should be worded in such a way that anyone can understand them.
"A bill that's just a series of computer codes is not going to mean anything to the person reading it," he says.
Brockman suggests listing customers' purchase order numbers, matching the work order, contract or packing slip and specifying the quantities ordered, shipped and back-ordered.
4. Include a telephone number the customer can call if there are questions. Brockman says accounts receivable personnel should be trained to field questions.
"Make sure your accounting department recognizes their customer service responsibilities," he says. "They can have as much impact on satisfaction levels as your main salesperson."
5. Send bills promptly, as soon after goods are shipped or services rendered as possible. Wait too long, and the buyer may forget the transaction and be surprised by the bill.
"If you have surprises, you're going to have problems," Stevenson says. How to reach: Brockman, Coats, Gedelian & Co., (330) 864-6661; Brouse & McDowell, (330) 535-5711; Roetzel & Andress, (330) 376-2700
Staying on track
Many companies lose track of late payments from customers simply because they don't track the payment of bills. If a bill is due on the 30th day after delivery of goods or rendering of services, someone should check to make sure payment is in fact received by that day, says Roger Stevenson, a partner at Roetzel & Andress.
Appointing someone to make a phone call to the customer soon after the payment due date can head off future late payment or nonpayment problems, he says.
In addition, "improving your billing process can eliminate excuses for customers who are looking for them," says Dave Brockman of Brockman, Coats, Gedelian & Co.