By PharmaSeek's Accounting Specialist Ryleigh Meier and Senior Accounting Specialist Beth Scharmer
When the time comes to invoice your clinical trial expenses, do you find yourself feeling a bit overwhelmed? We’ve identified a few tips to help your site create an efficient process that can save you from invoicing headaches and help your site recognize clinical trial revenue.
Tip #1: Know Your CTA Payment Terms.
Although this point might seem obvious, taking the time to really understand your payment terms before you need to create an invoice is an important invoicing step that is often missed. Yes, the payment terms are laid out in the CTA and can be referenced at any time, but the time it takes to gain an understanding of the nuances of a particular CTA’s terms is really better spent before you’re faced with generating an invoice.
Not knowing your study’s payment terms might lead you to unintentionally create an invoice that doesn’t qualify for payment. You could end up with an invoice aging in your system, causing a major delay in receiving payment for your study—especially since sponsors/CROs don’t always communicate that your invoiced items don’t qualify for payment until you follow up. You may need to revise and resubmit; depending on the length of time the original invoice sits in your system, you may find that you’ve missed your window for receiving payment for certain invoiceable items or services.
Tip #2: Reach out for clarification.
Most sponsors and CROs make automatic visit payments based on electronic data capture (EDC) entry, but occasionally, you’ll run into an organization that wants you to invoice for visits. This should be explicitly stated in your CTA, but if you don’t know your CTA terms or if they are unclear, you may not know to invoice for visits until you realize it has been several months since you’ve received a payment. Know what’s invoiceable – if the CTA isn’t clear on whether something will be paid via invoice or automatic EDC entry-based payments, reach out for clarification.
Tip #3: Create your own trackers.
Outside your accounting program, set up your own visit/payment trackers in Excel for each study. Although this might seem like extra effort, creating your own trackers will allow you to clearly see all your information in one place. You’ll be able to easily see whether certain items have been invoiced and which still require your attention, and you’ll be able to keep track of payments received, withholding accrued, outstanding visits, actual frequency of payments, visit/procedure costs, etc.
Another benefit: creating your own trackers will be hugely advantageous as you reconcile with your accounting system.
Tip #4: Always include the necessary basics.
Although the exact terms of each CTA differ from study to study, there are a few things that will help mitigate the risk of payment delays for every invoice. In order for an invoice to be processed as quickly as is reasonably possible, typical clerical info—such as date of invoice, internal invoice number, site name, PI name, and payment remittance address—should always be included. You should also be sure to add a “bill to” section to your invoice, listing the payer’s address, email, protocol number, and site number if known. For a typical invoice, also include:
- subject number
- description of the visit/item/procedure
- cost of that visit/item/procedure
- a total at the bottom adding all line items
Tip #5: Be on the lookout for special circumstances and requirements.
Some studies deduct withholding from each visit payment; check your CTA and calculate these deductions into your invoice if they apply. Some sponsors/CROs require back-up documentation for invoiceable items and services such as dry ice, advertising, rescue meds, imaging reports, etc., while some are more lenient and don’t require receipts. If your study requires receipts and back-up documents, be sure to include those as well. Sponsors/CROs will be able to process your invoice faster if you send the required receipts and back-up documents with your invoice right away rather than waiting for the sponsor/CRO to request them. Conversely, if receipts or back-up documents are not required, confirming this will save you from wasting time tracking down unnecessary documents.
In other circumstances, you may be required to invoice Screen Failures and unscheduled visits (USVs) on a per procedure completed basis. Read your CTA terms to see if this is necessary and if it is, create an invoice that lists out each procedure, the date it occurred, and the amount of the procedure. Don’t forget to apply overhead if applicable (see below for an example):
Tip #6: Pay attention to payment term language.
Although start-up costs typically aren’t paid until after the study initiation visit (SIV), and payments for close-out costs generally aren’t made until the close-out visit has occurred and all supplies have been returned, some CTAs may actually provide opportunities for invoicing these costs up front. If the particular CTA you are referencing does not explicitly state “to be paid at end of study (EOS)” and simply states, “will pay upon invoice,” you may have justification to invoice for archiving/close-out with start-up.
Tip #7: Check for errors and resubmit invoices as soon as possible!
If you notice an error in an invoice after it has been sent (e.g. incorrect visit date, incorrect amount), fix that error and send the corrected invoice ASAP. A fast turnaround is especially important here as some CROs/sponsors extend the payment terms when an invoicing error occurs. For example, if you submit an invoice on 5/8/18 for a study with monthly payment terms, your site would expect payment by 6/7/18. If an error is found in the original invoice and a correction isn’t submitted until 6/2/18, the 30-day clock might be restarted from the date of resubmission. Instead of receiving payment in June, your site wouldn’t see that revenue until July. Again, this only happens with some CROs/sponsors as most will try to pay the invoice right away, but the potential delay in payment certainly makes this something to be aware of!
Tip #8: Check for duplicates!
This may seem like extra effort when you’re invoicing, but it’ll save you from a lot of hassle in the long-run. If a previously paid/invoiced item is included on a new invoice, the CRO/Sponsor may find that error and require an invoice resubmission (see tip #6). Sometimes they won’t check for duplicates and will process the payment anyway, resulting in a double payment. Most CROs/sponsors reconcile payments at EOS, so your site will be billed for that duplicate payment after the study has ended.
Whether your site runs one study or many, taking the time to gain a solid understanding of each study’s payment terms from the outset makes it much easier when the time comes to create an invoice. Putting in the extra effort to create your own trackers will allow you to easily track your invoiceable items, keep your and invoices and payments up-to-date, and will help you catch invoicing errors and duplicates before they can cause problems for your site. Following these tips will give you the tools to justify any payment disputes that may arise and will give you a stronger sense of confidence when sending your invoices to the sponsor or CRO.