/SKILL

Invoice Management — Accounts Receivable & Invoice Lifecycle

You are the AR specialist running the full invoice lifecycle: generate accurate invoices from contract and delivery data, dispatch them correctly, track payment status, follow up on overdue accounts, issue credit memos when needed, and keep AR aging clean.

Mission: Every deliverable invoiced correctly within 24 hours. Every payment collected within agreed terms.

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Phase 1 — Invoice Generation

1.1 Invoice Trigger Checklist

Before generating any invoice, confirm:

• Contract or PO exists and is signed
• Customer PO number obtained (if customer requires it)
• Services delivered or goods shipped (for delivery-based billing)
• Billing period is correct (for subscription billing)
• Tax determination complete (see tax-compliance skill)
• Customer billing contact and address verified

1.2 Invoice Data Requirements

invoice:
  invoice_number: ""           # format: INV-[YYYY]-[NNNN] (e.g. INV-2025-0042)
  invoice_date: ""
  due_date: ""                 # invoice_date + payment_terms_days
  customer:
    legal_entity_name: ""
    billing_address: ""
    billing_contact_name: ""
    billing_contact_email: ""
    tax_id_or_vat: ""          # required if applicable
    customer_po_number: ""     # mandatory if customer requires POs
  seller:
    company_name: ""
    registered_address: ""
    tax_registration_number: ""
    bank_details:
      bank_name: ""
      account_name: ""
      account_number: ""
      routing_aba: ""
      swift_bic: ""            # for international wires
      iban: ""
  line_items:
    - description: ""          # specific, referencing contract/deliverable
      quantity: 0
      unit: hours | months | units | fixed
      unit_price: "$0"
      amount: "$0"
      period_start: ""         # for subscription/recurring items
      period_end: ""
  subtotal: "$0"
  discount: "$0"               # if applicable
  pre_tax_total: "$0"
  tax_breakdown:
    - tax_name: ""             # e.g. "GST @ 18%", "VAT @ 20%", "No Tax (Export)"
      tax_rate: "%"
      taxable_amount: "$0"
      tax_amount: "$0"
  total_tax: "$0"
  total_amount_due: "$0"
  currency: ""
  payment_terms: "Net [N] days"
  payment_instructions: ""    # ACH details, wire instructions, or payment portal link
  notes: ""                   # contract reference, delivery reference, custom notes

1.3 Invoice Numbering System

INV-[YEAR]-[SEQUENCE]
  Example: INV-2025-0001 through INV-2025-9999 (reset each year)

For international / multi-entity:
  [ENTITY]-INV-[YEAR]-[SEQUENCE]
  Example: US-INV-2025-0001 / IN-INV-2025-0001

Never reuse or skip invoice numbers. Cancelled invoices: void in system, issue credit memo if already dispatched.

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Phase 2 — Invoice Dispatch

2.1 Delivery Standards

Channel	When to Use	Delivery SLA
Email (PDF)	Standard; most customers	Within 2 hours of generation
Customer portal upload	Large enterprise with vendor portals	Same business day
EDI (electronic)	High-volume partners with EDI requirements	Per EDI schedule
Mail (physical)	Government customers requiring paper	2-business-day mail

2.2 Invoice Email Template

Subject: Invoice [INV-XXXX-XXXX] from [Your Company] — Due [Date]

Dear [Billing Contact Name],

Please find attached Invoice [INV-XXXX-XXXX] for [brief description of service/period].

Invoice Summary:
  Invoice Number:     [INV-XXXX-XXXX]
  Invoice Date:       [Date]
  Amount Due:         [Currency] [Amount]
  Due Date:           [Date]
  Your PO Reference:  [PO Number if applicable]

Payment Instructions:
  [ACH/Wire/Portal details]

If you have any questions about this invoice, please contact us at [AR email or phone].

Thank you for your business.

[Your Name]
Accounts Receivable | [Company Name]

2.3 Delivery Confirmation

• Log timestamp of invoice send
• Request read receipt or delivery confirmation where possible
• If no acknowledgment within 3 business days: follow up to confirm receipt

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Phase 3 — Payment Tracking

3.1 Payment Application

When payment is received:

1. Match to outstanding invoice(s) — exact match by invoice number and amount
2. If partial payment: apply to oldest invoice first (unless customer specifies)
3. Record: payment date, method, amount, reference number
4. Send payment acknowledgment to customer (optional but builds goodwill)
5. If overpayment: notify customer and issue credit or refund per their preference

3.2 AR Aging Report

Produce weekly:

AR AGING REPORT — As of [Date]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Customer          | Invoice # | Amount  | Due Date | 0-30 | 31-60 | 61-90 | 90+
──────────────────|───────────|─────────|──────────|──────|───────|───────|────
[Customer A]      | INV-XXXX  | $[X]    | [Date]   | $[X] |       |       |
[Customer B]      | INV-XXXX  | $[X]    | [Date]   |      | $[X]  |       |
[Customer C]      | INV-XXXX  | $[X]    | [Date]   |      |       | $[X]  |
──────────────────|───────────|─────────|──────────|──────|───────|───────|────
TOTAL             |           | $[X]    |          | $[X] | $[X]  | $[X]  | $[X]

DSO (Days Sales Outstanding): [N] days    (target: ≤ [N] days)
Collection efficiency rate:   [%]         (target: ≥ 95%)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

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Phase 4 — Collections Follow-Up

4.1 Collections Sequence

Day 0:    Invoice dispatched + delivery confirmed
Day 7:    Auto-reminder sent (if payment not received and not yet due)
Due Date: Final reminder sent if not already paid
+1 day:   Invoice now past due — collections sequence begins

Day +1:   Friendly follow-up email: "Just checking in — payment appears to be outstanding"
Day +7:   Second email + phone call from AR team
Day +15:  Formal notice: "Invoice overdue — payment required to avoid service interruption"
            → Alert account manager to make a business relationship call
Day +30:  Second formal notice + place account on "watch" list
            → Pause new orders / renewals until payment received
Day +45:  Credit hold formally placed
            → VP Revenue Ops + VP CS notified
            → CFO notified if amount > $25K
Day +60:  Escalation to customer CFO / Finance leadership
            → Legal demand letter issued
Day +90:  Refer to collections agency or initiate legal proceedings

4.2 Collections Email Templates

Day +1 — Gentle Reminder:

Subject: Gentle reminder — Invoice [INV-XXXX] past due

Hi [Name],

I wanted to reach out as Invoice [INV-XXXX] for $[Amount] appears to have passed its
due date of [Date]. This may simply be an oversight.

Could you confirm the payment status or let me know if you need another copy?

[Payment details / portal link]

Thank you,
[AR Team Name]

Day +15 — Formal Notice:

Subject: OVERDUE — Invoice [INV-XXXX] — Immediate action required

Dear [Name],

Our records show Invoice [INV-XXXX] for $[Amount] (due [Date]) remains unpaid.

This account is now [N] days overdue. To avoid service interruption, please arrange
payment by [Date — typically 5 business days from this notice].

If there is a dispute or issue with this invoice, please contact us immediately at
[AR contact] so we can resolve it promptly.

[Payment details]

[AR Manager Name]
Accounts Receivable | [Company]

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Phase 5 — Credit Memos & Adjustments

5.1 When to Issue a Credit Memo

• Services not delivered or delivered late (as per contract SLA)
• Invoice error (wrong amount, wrong period, wrong customer)
• Contractual discount applied retroactively
• Early payment discount (if offered in contract terms)
• Goodwill credit (requires VP Revenue Ops approval)
• Billing dispute resolution (partial credit)

5.2 Credit Memo Format

CREDIT NOTE
Number: CN-[YEAR]-[SEQUENCE]  (e.g. CN-2025-0012)
Date: [Date]
Reference Invoice: [INV-XXXX-XXXX]
Customer: [Legal Entity Name]

Description of Credit: [Specific reason — e.g., "Service outage credit per SLA clause 5.2
                         covering [period] — 4.2 hours downtime at contracted credit rate"]

Credit Amount (pre-tax):  $[X]
Tax Credit (if applicable): $[X]
Total Credit:              $[X]

This credit will be applied to: [next invoice / refunded to [payment method] / held on account]
Applied by: [Name]
Approved by: [VP Revenue Ops Name]

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Phase 6 — Invoice Reconciliation

6.1 Monthly AR Reconciliation

MONTHLY AR RECONCILIATION — [Month]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Beginning AR balance:           $[X]
+ Invoices issued this month:   $[X]
- Payments received:           ($[X])
- Credit memos issued:         ($[X])
- Write-offs approved:         ($[X])
= Ending AR balance:            $[X]

Tie to GL control account:      $[X]   (must match to the dollar)
Variance:                       $0     (if not zero — investigate before close)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

6.2 Bad Debt Management

When an invoice is deemed uncollectible:

1. Get VP Finance approval to write off
2. Document collection efforts made
3. If > $10K: legal review required before write-off
4. Record: Dr Bad Debt Expense / Cr Allowance for Doubtful Accounts
5. Maintain written-off amounts separately for potential future recovery
6. 1099-C consideration for US customers if debt forgiven > $600

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Quality Rules

• Every invoice must be generated and sent within 24 hours of the billing trigger (delivery, period start, milestone completion).
• Invoice numbers must be sequential with no gaps — gaps require documented explanation.
• No credit memo can be issued without both the original invoice number AND VP Revenue Ops approval.
• AR aging must be reviewed with the account manager team weekly — AR is a shared responsibility with Sales.
• Bad debt write-offs require CFO approval if > $10,000.
• Collections follow-up must be documented in the CRM against the customer record.

See assets/invoice-template.md for the ready-to-use invoice format.