Scanned and Delivered Part 1
Abstract
One of the most critical areas for many Credit Professionals is the management of Proofs of Delivery (PODs). This article considers the benefits and issues of scanning and storing PODs electronically and looks at alternatives to traditional multi-part stationery and clunky dot matrix printers for producing POD documents. The article also examines the pros and cons of handing over the responsibility of POD scanning to third party couriers and haulers. Third parties managing your PODs frees up your time, but do they have the necessary technologies and procedures in place to meet your requirements?
The burden of proof
In order to protect themselves against erroneous or deceitful claims
from customers, businesses that supply goods on credit need to
retain some evidence that the goods have actually been delivered –
or indeed collected. Traditionally, this has meant printing despatch
notes in duplicate and retaining one copy that has been signed by a
representative of the customer when the goods were delivered.
Sometimes a third copy is used if the goods are to be delivered by a
third party courier or hauler. Quite apart from the inefficiencies of
producing multiple pieces of paper and the expense of using multi-part stationery, the filing and retrieval of proofs of delivery (PODs)
presents a number of challenges and can become a very time consuming
aspect of the cash collection process.
Signed PODs are usually returned to the accounts department some days after the despatch of the goods. The documents, which are often printed on very thin or carbonized paper, are often soiled and torn. They are never returned in order. Some will not be clearly signed. Others never make it back at all.
Since these documents can be essential in getting paid, they need to be filed in some meaningful way. This may mean sorting them by despatch date, by customer or by order number. Ideally they are filed with a copy of the customer’s order and the invoice for the goods. None of which is a trivial task. Some businesses do not raise an invoice until a POD has been received, so any delay in receiving and sorting PODs will hurt cash flow.
Clearly PODs, and other similar documents such as confirmations of despatch and certificates of shipment need to be retained at least until the related invoices have been paid. Arguably, they should be retained as part of accounting records for seven years. In the case of exported goods, the same documents may also be required to prove that goods have left the country.
Filing is one thing, retrieving them is another. Many customers frequently request copies of PODs. This usually means retrieving the document, taking a photocopy and faxing it to the customer with a cover sheet – a process which can easily take ten minutes each time, even when PODs are present and well filed. If a POD cannot be produced on request, the customer knows there isn’t a strong case for proving that the goods have been delivered and the chances of the supplier getting paid are diminished.
Despite advances in Enterprise Resource Planning (ERP) systems, electronic ordering and stock control systems, the need to produce copies of PODs is not declining. Quite the reverse in fact. As the accounts payable functions become increasingly detached from business units, the need to match invoices with a POD as well as with the order is becoming routine. If an invoice cannot be easily matched to a POD, it won’t get paid. At least, not without considerable delay. Many large organizations with regional offices, branches or depots, place the onus on the supplier to provide copies of all PODs to head office before payments can be processed. All too often a missing POD will mean the write-off of an invoice.
Part 2 "How can an electronic document management system help?" -->
