Documentation

• One primary reason that billing and reimbursement remains important for businesses is documentation. Billing customers is an efficient way to document services rendered or products purchased, including date, labor involved, materials and amount due. After reimbursement, businesses document funds received to balance the account. Documenting these transactions provides a record for the business, customers, IRS, insurance companies and other agencies.
  
  

Profit

• The goal of the vast majority of businesses is to turn a profit. Without billing and reimbursement, retrieving money owed becomes inefficient. Billing customers for money owed sets the timetable for repayment; if customers don't repay, the date billed provides a starting point for calculating when an account enters a late or delinquent status. Bills alert customers to how much is owed and how to remit payment, making reimbursement a formalized and simplified process.
  
  

Legitimacy

• Formalizing your billing and reimbursement processes adds legitimacy to the business. A customer might question whether the price is accurate, whether the business is operating under the table and whether her payment will be applied to an account or pocketed if a plumber fixes a leaking sink and then announces that the customer owes $150. Legitimacy increases when bills are itemized and documented so that customers feel safe knowing they've been fairly assessed charges and that there is a record of reimbursement.
  
  

Customer Relations

• The importance of billing and reimbursement also extends to customer relations. Some businesses use billing as an opportunity to market new products and services with inserts and flyers. Handling inquiries and complaints about reimbursement with professionalism is another way to establish positive relations with customers.
  
  

Expansion

• Billing and reimbursement can also help businesses expand. Reinvest the steady flow of revenue from regularly paid accounts after purchasing materials and paying workers. Profits from regular reimbursements can pay for better equipment, new trucks, updated software and more sophisticated advertising. Irregular payments and delinquent accounts make it harder for businesses to establish the kind of regular, positive cash flow needed for expansion.
  
  

Analysis

• Formalizing a billing and reimbursement process can also help businesses analyze sales and trends to better develop strategies. For example, running a report on zip codes used to bill customers in the previous quarter can give you a better idea of where the majority of customers currently live, and where you might want to increase advertising and promotions around town to increase business in slower areas.