Guidelines on selling to and invoicing big businesses
In this post I’m having a look athow to sell specifically to larger companies and the best way to invoice. Weve previously covered how to build watertight invoicesand chase effectively. Nothing covered in those posts changes when it comes to selling to larger companies.
Were there to be an effective invoicing equivalent of the US Declaration of Independence, these are definitely the truths that wed hold to be self-evident. At the same time, larger companies are very different animals to the small and medium-sized enterprises (SMEs) that make up over 99 per cent of the business population. This articlehighlights the key differences and what you should do in light of them to help your invoices to larger companies achieve their purpose in life: that of getting paid.
They do things differently here
What are the key differences with larger companies when it comes to paying their invoices?Separation of responsibilities: It is very rare that the main person you do business with at this large company is the same person who is responsible for paying your invoice. You may deal for example with the marketing, purchasing or logistics manager when it comes to making the sale. But it will be someone in the finance or even specific accounts payable team who is responsible for paying invoices.
Geographical separation: This follows from the point above. In an SME, everyone is likely to be in the same office. In a larger company, the Finance or Accounts Payable team will likely be of a size such that they are on a different floor or even in a different building from the main person you deal with. In the case of really large global companies, they often have overseas shared service centres for finance and accounts payable. The person responsible for paying your invoice may be in a different country altogether.
The purchase order reigns supreme: If you are selling to larger companies you need to understand the critical role of the purchase order. Larger companies will have departmental and team budgets agreed. A purchase order is the internal document that someone must get approved in order to spend some of that budget. The finance and accounts payable team process will invariably require a purchase order number (i.e. the cost has been approved internally) before they will pay the relevant invoice.
What you need to do
When it comes to the responsibility and geographical separation, knowledge is power. You need to find out how the larger company you are selling to works, who is responsible for what and how best to deal with them. Never be afraid to ask the question(s). Once you’ve found out who the relevant person/people/team is, be sure to have the right contact details. don’t put yourself at the mercy of getting lost in the switchboard jungle (in the immortal words of M Beat featuring General Levy: it’s massive). don’t settle for generic front desk phone numbers or finance@ email addresses. It will ultimately be a real person with a name, face, email address and telephone number who is responsible for paying your invoice. Get their details.
David Tuck began his career with Deloitte where he became a chartered accountant and chartered tax adviser. Thereafter he headed finance teams for Fever-Tree, which IPO?d in 2014, and WAYN.com, the social network, both of whom sold on payment terms. In 2013, he co-founded Chaser to build software to help businesses automatically chase up their customers to pay their invoices on time.