Chaos Is Cash
Updated: Sep 14
Messy, jumbled progress payments and cost validation evidence (collectively referred to as an ‘invoice’ within) is a contracts management pet peeve. Why do invoices arrive with upside down, missing, illegible, or meant-to-be-omitted-because-it-relates-to-another-client content, when at the click of a mouse it would have been corrected and at least one other person looked at it (or was supposed to have looked) prior to submission.
And so I wonder….
Does chaotic invoicing actually benefit someone; a ‘chaos is cash’ tactic where opportunism and profiteering pays off?
Whether it is innocent or culpable in nature, it takes up precious labour hours while people waste time in cost validation and puzzling the evidence together, challenges the P2P cycle time which affects everyone’s pocket book, and does not give the warm-fuzzies towards the vendor that produced said invoice. We’ll be worrying and wondering if these unruly invoices are a symptom of rooted disorganization and a lack of focus on quality and care. Warning, relationship management challenges ahead.
What does chaotic vendor invoicing signal to you? A few signals are:
1. Erroneous billing found here.
Hopeful case: the disorganization lead to accidental error. Worst case: the disorder intentionally creates confusion so reviewers look at the disorganization rather than the detail. Baffling with bullsh*t a valuable trick. The good news: Cost savings will be reported.
2. Winter is coming and so are the claims (or claims veiled as change requests). Forgotten invoicing, or unrecognized implications above and beyond the contracted price are going to show up. There’s no avoiding it if the vendor’s end of year rolls by with the contract still in progress or if the time bar provisions have yet to conclude. Another related symptom of the rooted disorganization? The bad news: getting paid via sympathetic and forgiving contracts/ project/ operations managers must work otherwise it wouldn’t happen so often.
3. Anticipate high degrees of pressure to ‘just pay’ this invoice. There seems to be a correlation between unruly invoices and the behaviour of the vendors who submit them. These are the vendors who are going to demand your attention first, who will position that they are totally trustworthy whereby you pay now and reconcile later, who will contest loudly against submitting a revised invoice. These vendors are also likely to be the ones rushing to senior management to flex the ‘woe is me’ case, employ sympathy grabbing threats, and downplaying the relevance of ‘clerical and administrative burden’ (aka cost accountability and transparency).
The truth is, I have compassion for the organization producing unruly invoicing. There likely are cashflow issues and it probably feels like a significant burden to revise and resubmit invoices. I have no doubt that disorganization, particularly where money and cashflow is involved, affects the bottom line and has ripple effects across the operation.
Such compassion and understanding, however, neither justifies enabling such organizational weakness, deviating from the contract, nor dismissing cost accountability and transparency.
The best news is that creating organized and well evidenced invoices, having well defined procedures and systems that support AP/AR and cost management, and maintaining valid records of cost with reverence for your contracts and client expectations are all possible and can be standard practice in your organization. Hire and empower the right people or third parties, have the courage to implement organizational change, and select systems wisely.
Choose to deliver quality to your clients in everything we do while building a business that is as honestly financially successful as possible.