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  • Writer's pictureJoel White

Case Study - The Shortcut

I once worked at a company where after a new contract with a customer was signed- often with large upfront payments due on signature ($1m or more was not unusual)- a process had to be followed to invoice said upfront payment. The process was roughly 15-20 steps.


My team and I were responsible for negotiating those upfront payments, high-fived every time we scored a big one, but were often left scratching our heads when the resulting invoice wouldn’t go out for another 2-4 weeks, sometimes longer.


I learned that sending the initial invoice to the customer was step 13 or so of the process. Every detail of the new contract had to be perfectly set up and validated in the financial system. The larger the amount due on signature, the more approvals had to be obtained…for a plainly written amount in a contract just signed.


This went on until we noticed a multi-million dollar advance payment that should have been paid by quarter end slipped out of the quarter because it was invoiced nearly a month after the contract was signed. Ironically, I learned of the dollar from the customer asking me what the hold up was on “that huge advance payment you HAD TO HAVE”.


There were certain audit and system reasons the process needed to stay the same for 90% of projects, so here is what we worked out:

  • By exception only, my team could request the Accounting team expedite invoicing on specific high value advance payments.

  • The Accounting team found a shortcut (pro forma invoice) to issue the invoice at step 2 of the process instead of step 13.

  • No questions asked- we agreed to trust each other that when the exception requests were made, they were for a good reason, and would be processed rapidly every single time.

These invoices typically shipped in 1-2 days, instead of 2-4 weeks, and significantly boosted cash flow performance that same quarter. No one abused the exception process. No more customers asking “hey when are you going to let me pay you $1m?”.


Bottom line- processes expand over time and systems (especially financial systems) often add to this complexity. What gets lost is- what parts of the process actual drive financial results, why have those parts been pushed to the tail end of the process, and what can you do to bring them towards the front. And if you can’t move them forward every time, how can you ensure it at least happens for the most valuable opportunities?


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As always, contact me or book a meeting to discuss how these principles can be applied to improve the performance of your business.

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