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Importance Of Having A Billing System

By Chloe Gib

Many people want to grow their organizations to be the top firms that everyone talks about. In order to achieve this, an organization must set out clear structures that ensure that every sale is clearly recorded and that the economic entity gets value from its output. The firm should have a good billing system to be able to keep track of all its sales whether sold on cash or on credit.

Various departments need information obtained from customer bills thus making it an essential document in an organization. The presence of a document therefore ensures that information flows smoothly within the organization thus making it easy to follow up on the customer while keeping up to date records.

It also ensures that it has proper records for tax purposes. This is important to the tax collection authorities since they are able to establish the actual amount of sales revenue that it received during a given period of time therefore the amount of tax due to them.

When a firm invites auditors to conduct an audit, customer bills is one of the important documents that they scrutinize. This is aimed at ascertaining the occurrence and accuracy of information in these documents. Among the things they look out for is the chronological numbering. It is of great importance since absence of this may lead to the auditor giving a qualified opinion on the financial statements of an economic entity.

It also makes it easy to follow up on debtors when payment is due. This acts as a reference document when informing them that they should pay their outstanding balances. This way, the organization ensures that some amounts are not forgotten. This makes the entity reduce instances of overdue credit sales of the economic entity.

When a firm has it, these bills can be used as evidence in a court of law. This makes it necessary for any serious firm to have it. This is the best basis for the firm to recover its debts since the court relies on evidence that a sale was actually made on credit to the other party. The absence of this makes it difficult for any organization to ever recover its money in a court case.

It is essential for any firm heading to success to therefore have a proper billing system that is able to record all material transactions of the firm and able to keep track of its receivables. In fact any major customer or supplier requires that the enterprise bills them for their own record keeping. For the firm to be able to interact with these top notch firms whether as customers or suppliers, this is essential to have this. Tax authorities also scrutinize this system.

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Article Citation
MLA Style Citation:
Gib, Chloe "Importance Of Having A Billing System." Importance Of Having A Billing System. 19 Jul. 2012. 8 Jan 2015 <>.

APA Style Citation:
Gib, C (2012, July 19). Importance Of Having A Billing System. Retrieved January 8, 2015, from

Chicago Style Citation:
Gib, Chloe "Importance Of Having A Billing System"

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