Many businesses underestimate one of the common expenses they incur: The cost of sending invoices. There is much more to it than the expense of paper and postage.
For example, if you are paying $25/hour for office staff, that means they cost 41c per minute. Therefore, spending just 2 minutes on a single invoice costs at least 82c just in labour. (This does not take into account the real cost of employees which includes Superannuation, WorkCover, Taxes, training, equipment, safety, etc.)
Management costs are especially painful. Time spent supervising the payment process, purchasing materials, making equipment repair or purchase decisions, revising invoices, etc. is time not spent on core business tasks. What new profit points could be developed, or innovations discovered, if the time for invoicing was reduced?
Of course, If you are still printing invoices, more physical time will be involved as well as the paper, ink, printer rent and maintenance costs, etc.
But let’s say you are a modern up to date business which doesn’t print and post invoices, but rather you PDF and email. Are there still savings that can be made?
Yes of course. Cloud accounting solutions open up the possibility to send invoices directly from the invoice creation screen in your current accounting software. This reduces the time spent on invoicing even further while providing you with valuable business intelligence.
So, if you were able to save 2mins per invoice, and you were sending 100 invoices per month, there is a minimum saving of $82 per month. More than double that for printing and postage, and add the overheads in which could double it again.
Gartner estimates that a 5% reduction in operating costs has the same P&L impact as a 30% increase in sales*.
With that in mind, look for ways to streamline the invoicing process and evaluate systems like Link4 which may have a positive impact on your bottom line.
* The Gartner Group, “The redesign of the B2B Order to Cash Process.”