It’s not just how fast you get your bills out;
it’s how fast you can get them into your customer’s hands.

That’s the business case from moving to electronic billing whenever possible.

Depending upon your average length of time for mail to get to customers, it could save two to three days. Then you have to consider how many of your customers start the meter from when they received the bill. Like it or not, there are some customers that work that way. So one way to determine the value of converting to electronic billing could be taking two days out of your day’s sales outstanding in accounts receivable and seeing what the value of that would be. That could more than offset some cost of electronic billing.

However, there might be other factors too. Certainly, by billing electronically, you might cut down on some of your processing costs by sending out invoices. Certainly, there’s savings in the paper and the mailing and the staff time you have to put together the invoices. These savings can add to the return on investment from going to electronic billing wherever possible.

Electronic billing might also be easier for you customers to work with. If you have some large customers, they might very well be demanding that you convert to electronic billing, such as what they might call EDI, electronic data interchange.

Another benefit of getting it into the hand sooner in your customer is that it may help to snuff out problems quicker. Better to know sooner rather than later and nip it in the bud while it’s fresh in your mind.

So check with your IT department or outside technology partner and see what might need to be done to put this in practice. You may also want to check with customers and see what the process would be for them to be able to receive it.

Another benefit of electronic billing could be an easier reconciliation process with customers. If you have some large customers or customers where you have a sizable number of invoices, EDI between your two systems could make the account reconciliation much easier moving it to more of a semiautomatic process from being a very manual process. That can be another huge savings with large accounts.

Well, what if you’re smaller? What if there are just certain instances and maybe you don’t send out many bills per month. Well, then maybe you’ll just be able to have your invoices in a form that you can just send them out electronically by email. It could be worth it alone just on the savings you have on the administrative end. However, I also think you’ll get some benefits by having it in the customer’s hands faster and getting payment.

Another benefit from the electronic billing, particularly if you can do it by email or some form where you get a receipt acknowledged. This can give you proof that the invoice was received by the customer. You can get away from the lost in the mail syndrome about the invoices.

 

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value