Pre or Post Invoicing Sytem?

In 1978 when I was appointed as Credit Control Supervisor, Sterling Drugs (later change to "Health"); the company was using Post Invoicing System. Meaning, Invoice is prepared after the goods were shipped and signed acceptance by the Client. Once the Chop & Sign Delivery Order is signed, a copy shall be forwarded to Credit Control Department to issue its Invoice. The said Invoice will only be posted to the Client accordingly.

Now, can you imagine the time lost - from the time the goods left the Warehouse, delivered to the Client's premise, bring back the Delivery Order, prepare and post the Invoice while posting again takes few days ( payment will only be made 30 days from the date of the Invoice). In view of this System and Procedure, the company lost about 14 - 30 days.

The Client normally will take 30 - 60 days to issue the check and will take few days to reach the office. Thus will effect the Cash Flow tremendously.

Realising this inefficiency and ineffectiveness, I personally introduced "Pre-Invoicing" system and procedure. It involved Sales & Marketing Department, Warehouse Department and Credit Control Department.

Once the Salesperson placed the order and submit to Warehouse Department, Stock availability and Credit Limit will be established. Immediately, Invoice is prepared by Credit Control Department. The Warehouse Department staffs will then deliver the Goods together with the Delivery Order and Invoice. Thus, the 30 days credit period is counted from the day the goods were received. Henceforth, there will be no idle time lost. As a result, the Credit Report or Aged Listing Report had been enhanced and reflected the true transaction period.

Sterling Health had investment (factories) in 52 countries throughout the world. Before I introduced the system and procedure, sad to say that Malaysia was always the 3rd last company to submit its report to New York via telex.

Eversince my system and procedure was implemented, we were always in the TOP 3 countries to submit the report to New York Headquarters. The Vice President Finance from New York HQ came down to Malaysian office to understudy my system and procedure. Since then, all subsidiary and associate companies of Sterling Health throughout the world, ADOPTED my system and procedure.

As a reward I was given 15% salary increment ( a 16 years history was broken at that time - 1978 since no staff had ever recieved such a high increment). Then, I was promoted to Cost Accountant and thus became the youngest accountant in Malaysia - 23+ years old.