The Billing Clerk (#305)

In this podcast episode, we discuss the characteristics of an ideal billing clerk. The basic billing clerk job description is pretty straight-forward; this person prepares invoices, processes credit memos, and might issue month-end customer statements. But let’s dig a little deeper.

The Billing Clerk Personality Type

The main focus of this job is to issue invoices that are accurate and on time. What kind of person does this? Probably not the personality type that I talked about last time for a collections person, which is an outgoing negotiator type. For a billing clerk, you need someone who really enjoys getting into the details – probably an introvert. The essential ingredient for a billing clerk is someone who does not make mistakes. And there’s a good reason for that, because even a tiny mistake on an invoice could cause a customer to refuse to pay, in which case the company isn’t going to receive cash that it might have been counting on.

So, in a way, you need the ultimate bureaucrat. This is someone who always checks to make sure that the amount ordered is the amount that was actually shipped, and that the pricing stated on the invoice is the same one that the customer put in its purchase order.

Why a Billing Clerk Needs to be an Investigator

Now, in case you think the ultimate billing clerk is someone who used to work in a library and has a permanently pinched look when everything is not in perfect order – not so fast. The ideal person for this job is a little bit different. Whenever there’s an error somewhere in the paperwork, the best billing clerk goes on a hunt. This means heading over to the shipping department to talk with the manager about why a different quantity was shipped – or maybe something else was shipped as a replacement.

Or, it could mean a visit to the order entry folks, to see why a customer was given a special price that’s not in the standard price list. Or, maybe a visit to the marketing department, to see why a cooperative advertising allowance is being deducted from an invoice.

What the ideal billing clerk is not, is someone who sees an error and then just passively waits for the answer to arrive, without issuing an invoice at all. They’re not aggressive about it, so invoices could be delayed for days, or weeks.

What I’m getting at is that a good billing clerk is a good deal chattier than you might initially think is needed for the job. This implies that a somewhat more senior person, maybe someone who’s been with the company for a few years and knows everyone, would be the best operator for the job.

The Billing Clerk as Process Consultant

This gets us into the general vicinity of the right personality type, but we’re not there yet. The billing function is the place where two different sets of information come together. One is the customer order, which comes from the order entry department, and the other is shipping information, which comes from the shipping department. These two data sets don’t always match up, which means that errors will occasionally pop out.

A good billing clerk doesn’t just have a chat with the originating person in order to clarify matters, but also digs around to see if there’s a structural flaw in the system that allows the error to occur. Maybe there’s a missing control. Whatever it happens to be, the ideal billing clerk has such a good knowledge of the procedures that he or she can figure out how the error occurred, and how to fix it. This results in a recommendation to the controller, who works on altering the system to eliminate the error.

So as you can see, our conception of what constitutes a good billing clerk has advanced from – well, basically a monk, to someone who’s also comfortable hitting up other departments for information, and then to someone who’s also a bit of a process consultant.

Billing Clerk Training

As I noted earlier, a more experienced person is probably going to do better at this job, since it involves being fairly comfortable with prowling around the organization. But in addition, you can accelerate the process by imposing extra training up front. This would involve a detailed review of exactly how the billing process is supposed to work, and walking the person through the organization so that they can actually see it in operation.  It also means talking about when to flag an error, what’s probably causing it, and who to talk to in order to get it fixed. Essentially, you’re giving the clerk every tool needed to be a consultant.

It can take a bit of work to measure whether a billing clerk is a good one. You can certainly talk to the collections people to see if any customers are complaining about billing errors. Another approach is to track billing errors by type, to see if the clerk is fixing them over time, or just letting them ride – so that error rates don’t go down. You can also monitor how much the clerk is visiting other departments to clarify billing information. This means that you’ll need to assemble a picture from a number of sources, but it should give you a good idea of whether a billing clerk is a keeper – or not.

Related Courses

Credit and Collection Guidebook