Is there any feeling worse than an empty mailbox?
After all, you did the work, deployed your equipment and paid your people, but the invoice you sent your customer still hasn’t been paid.
You’re not alone. Over many years working with oilfield service companies, our team at VistaVu has seen plenty with Days Sales Outstanding (DSO) figures that are far higher than they’d like.
“You can tell yourself it’s the nature of the industry,” says Lamb, President of VistaVu Solutions. “Maybe so, but I’d respectfully ask oilfield service firms whether they’ve done everything they can do to speed things up.”
In fact, Lamb sees 6 ways companies can help themselves get paid quicker and keep their DSO figure reasonable. Here’s a quick rundown.
1. Accuracy. Obtaining correct project codes, PO numbers and contact names at the outset will allow you to create an accurate, actionable invoice later.
2. Timeliness. Why wait for information to come in from the field? A new generation of online tools can capture and transit field data in seconds.
3. Simplicity. “The terminology on your invoice should reflect the terminology your customer uses, not your own preferences,” says Lamb.
4. Efficiency. If a customer needs to re-key an invoice, this can add days to the payment cycle. Ask how you can submit your invoice to avoid re-keying at their end.
5. Follow-up. The time to call your customer’s Accounts Payable department is not when an invoice is past due, but right after you send it. Ask if there’s anything of concern that you can address up front.
6. Accountability. “Whatever behaviors you incentivize is what you create,” says Lamb. “Someone in your organization needs to be accountable for minimizing DSO, empowered to do so, and their year-end bonus can be directly tied to it. It works.”
