![]() This is especially problematic for invalid short pays, as those underpayments represent income that your business can legitimately claim.īut beyond the revenue impacts, short pays also present challenges when reconciling payments with open receivables. The most obvious business impact of short payments is the reduction in revenue these underpayments result in. ![]() The impact short paid invoices have on businesses Or they might do it because they simply want to pay less than required and hope you won’t notice or won’t follow up on the short paid invoice. A customer may make a short payment because they don’t have enough cash on hand to satisfy the full payment. Invalid reasons to short pay an invoice usually involve customers intentionally avoiding payment. Customers that aren’t using electronic payment management may simply write or key in the wrong amount, resulting in a short paid invoice. Another valid reason why customers might short pay is when they make an honest mistake.In that case, the tax-exempt organization may short pay by excluding the tax from their payment. One common error that AR teams make is charging sales tax to customers who are tax-exempt, whether it’s because they live in a state with no sales tax or they have tax-exempt status. ![]() The customer could pay the invoiced amount minus the extra item-resulting in a short paid invoice-satisfying what they believe is their obligation for the transaction. Perhaps an invoice lists the same item twice, but the customer only ordered one.
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