Invoicing delays – what is the real cost?
For many service-based companies, maintaining an efficient invoicing process represents one of the biggest challenges to success. This cash flow killer can be attributed to a number of factors – inefficient paper-based processes, low/no technology integration, and delays in capturing accurate and complete costs for labor, material, and equipment costs, among others.
These areas represent some of the obvious issues, but the bottom line is that delays due to manual and stand-alone processes represent a significant cost to your company in the following areas:
- Direct Costs
- Invoice Errors
- Negative Cash Flow
- Reputation and Customer Satisfaction
Exceeding Customer Expectations
With customer expectations at an all-time high, sending out an invoice quickly is your responsibility as a service provider. If you are still using manual paper processes, you aren’t getting invoices out as quickly as you could, or should. Your technicians complete the work, but the paperwork doesn’t make its way back to the office for multiple days, or sometimes weeks. It takes another 3-5 days for your office staff to create an invoice and send it out to the customer. By the time it lands on your customer’s desk it’s been weeks and if you’re lucky, they pay it right away.
Sterling Commerce, as part of their recent market analysis, determined that the average cost of a paper invoice can range anywhere between $12-$30. This includes direct costs like paper, ink, and postage. It also includes indirect costs, like paying an office administrator to manually enter all the data needed to create an invoice or the time it takes to stuff the paper invoices into an envelope to be mailed out.
The Costs Depends on How Many Invoices You Create Each Month?
Businesses also often overlook how much invoicing mistakes truly cost. On average, each paper invoice error costs companies $53.50 to rectify. It takes days for the client to receive, review, and send back an erroneous bill.
In the meantime, you have to pay for your technicians’ time, the truck and fuel to get them to the job, and any materials needed to complete the work. These invoice delays create a negative cash flow for your organization.
Lastly, how much does poor reputation cost your company? In today’s world of Netflix, Uber, and Amazon, your customers expect an exceptional customer experience. One way sure to disappoint a customer is invoicing them incorrectly or invoicing a month after the work was performed. Their perception will be that everything in your company is that inefficient!
Additional insights from the Sterling Commerce study found that manually-processed invoices cost, on average, $30 per invoice to process, while fully-automated invoices average only $3.50 per invoice to process. That’s a 90% cost savings by switching from manual paper invoicing to an automated solution.
It’s time to provide the experience that your customers deserve. Ditch the paper and adopt an automated invoicing process that will delight your customers and save you big!