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Business Owners: What is the Trust Cost of Invoice for Your Business?

Is your business one of the many that still invoice manually? It is easy to get stuck in the track of what you’ve always done. Many small business owners j


Is your business one of the many that still invoice manually?

It is easy to get stuck in the track of what you’ve always done. Many small business owners just like you don’t want to rock the boat by changing up day-to-day operations like invoicing.

While it will take a little effort on your company’s part to switch from manual invoicing, drawbacks of manual invoice are major. The benefits of electronic invoicing as just as impactful as the drawbacks of processing your invoices manually.

Continue reading to find out what the true cost of invoice is for your business. Learn how you can operate more efficiently and save your company money.

 

Trust Cost of Invoice Facts You Must Know

Turning a blind eye to how much time and money manual invoice processing costs your company will keep you from experiencing the pain of knowing how bad things really are. What turning a blind eye to this major problem won’t do is find a solution to the problem.

Companies with complex accounts payable processes may find themselves shelling out as much as $40-$50 to process each invoice. Calculate how many complex invoices you process each month, and you’ll feel the burn in your company’s wallet.

Here are some of the key drawbacks of manual invoicing on top of how much money it costs your company.

1. Time Consuming

Your team spends massive amounts of time on the manual invoicing process to achieve results that are less desirable than the results you would get from an efficient electronic invoicing system. The time consumption problem plays right into the higher costs problem since you’ll be paying more people to work longer hours. Your cost of operations will continue to rise as your business brings on more customers and processes more invoices.

2. Loss of Money

When you see the amount of human error that takes place, this factor alone should push you toward electronic processing. Problems including late payment penalties, missed discounts, duplicate payments, overpayments, and forgetting credit notes are not uncommon. These issues cause a major impact on your company’s bottom line.

3. Invoicing is a Snooze

Saddling your team with boring busy work isn’t good for morale. When your team isn’t challenged and are instead focusing on mundane tasks, you are more likely to deal with worker discontent and low drive. Manual processing is all about performing the same task day in and day out and being expected to keep all of the numbers straight.

 

Assessing Your Own Situation

As you look at your company, you’re likely to notice the above problems with your invoicing process are more than true. Instead of guessing how much it costs your company to process its invoices, use these factors to calculate the cost.

  • Invoice processing and mailing time.
  • Hours spent to review the invoice.
  • Hours spent to find and correct any data errors.
  • Shipping and storage cost for each invoice.
  • Productivity hours lost.
  • Hours lost on early-discounts or late fees.

Once you’ve gathered your numbers, use this formula:

Late fees + personnel costs + postage costs + lost discounts + storage costs / the # of processed invoices = cost of processing per invoice.

Figure these factors, use the formula and you will see your average cost of manually processing your invoices. The number you find is likely to be troubling, but you should also get excited. Now you see where you can make improvements in your company. This is an opportunity to increase the bottom line from one change in your processes.

`There are so many disadvantages to manually processing invoices that it shouldn’t even be a question as to whether or not you go electronic. Paper invoicing should be left in the past where it started. Not only does it hurt your company’s bottom line by the above factors but paper invoices incur costs like the cost of paper, ink, and postage.

 

Step Into the Electronic Age

Now you know how ineffective manual processing is and you know that paper invoicing costs your business money for materials and more. The best thing you can do for your business is change over to electronic invoice processing.

Workflow automation will improve your processes and make your company more effective overall. Change doesn’t have to be as scary as it sounds. When you work with a professional company to make the change, you can rest assured that the process will be almost painless.

E-invoicing is the solution your company needs to reduce costs, become more efficient, reduce the loss of productivity hours and allow your focus to go to what is important. E-invoicing allows your company to automate your invoicing process which means you get the following benefits.

  1. Reduced costs.
  2. Increased accuracy.
  3. Increased AP productivity
  4. Improved supplier relationships.
  5. Improved dispute handling.
  6. Ability to focus on higher value activities.
  7. Faster processing and payment cycles.
  8. Reduced fraud.
  9. Reduced duplicate payments.

When you begin using your new e-invoicing process, you will see how quickly AP no longer looks like a nightmare. Get excited about this process and get it started today so you can start seeing these benefits.

 

Conclusion

Running a business can be stressful when trying to grow your company’s revenue, manage relationships, increase profits and more. As important as dealing with ineffective invoicing processes is dealing with ineffective marketing practices.

If you’ve focused on your marketing efforts on outbound marketing, it is time to look at the wave that is taking many companies just like yours to the next level. Inbound marketing continues to prove to be the most effective way to build a long-term lead process that can be integrated with your sales team.

Our company is a HubSpot certified inbound marketing agency out of Los Angeles California. We help our clients increase their leads and conversions through proven inbound marketing strategies. Contact us today to see how we can help your company grow its revenue.

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