Errors during the data-entry phase of creating an invoice can result in a variety of downstream problems. For example, an incorrect billing address on an invoice means that the customer will never receive it, which means that the collections staff must send a new invoice copy. Also, if the quantity, product description, or price is entered incorrectly, the customer may have a good reason for not paying the bill. If this happens, the collections staff will have to get involved to work out the reason for nonpayment and negotiate extra payments (if possible) by customers. All of these problems are exceptions and require very large amounts of time to research and fix.
Solutions: Automatically Check Errors During Invoice Data Entry
A very useful solution is to prevent as many data-entry problems in advance as possible by using computerized data-checking methods that able to automatically check errors during the invoice data entry.
Example: a field for zip codes can only accept five-digit or nine-digit numbers, which prevents the entry of numbers of an unusual length. The field can also be tied to a file of all cities and states, so that entering a zip code automatically fills in the city and state fields. Also, prices of unusual length can be automatically rejected, or prices can be automatically called up from a file that is linked to a product number.
Similarly, product descriptions can be automatically entered if the product number is entered. An example of a ‘‘smart” data-entry system is one that flags part numbers that are being entered for an existing customer for the first time. The computer can check the part number entered against a file of items previously ordered by a customer and see if there is a chance that the part being ordered might not be the correct one. There can also be required fields that must have a valid entry or else the invoice cannot be processed; a good example is the customer purchase order number field, which is required by many customers, or else they will not pay the invoice.
Result Expected: By including these automatic error-checking and expert systems into the data-entry software, it is possible to reduce the number of data-entry errors.
The main problem with creating automatic error-checking is that it can be a significant programming project. There may be a dozen different error-checking protocols linked to the invoice data-entry screen, and each one is a separate programming project. Also, if a company purchased its software from a third party, it is common for the company to periodically install software updates issued by the supplier, which would wipe out any programming changes made in the interim.
Accordingly, it is best to apply these error-checking routines only to custom-programmed accounting systems. An alternative is to use error-checking as a criterion for the purchase of new packaged software, if a company is in the market for a new accounting system. In either of these cases, having automatic error checking is a worthy addition to an accounting system.