We all know by now that the best way to get more cash flow for your business is to employ best practices for accounts receivable, including sending invoices early and often, following up with a phone call, sending out past due notices and collection letters, and your other basic tips and tricks. These are all important and we don’t deny that. In fact, we highly encourage them. However, have you ever stopped to think how much invoices are costing you? Your traditional paper invoice may be costing you a lot more than you think, so we’ve broken down the cost per invoice so you can get a better idea.
Your traditional paper invoice usually goes through this process: the invoice is generated on the computer in a document and then printed out. That paper invoice is either faxed to the receiving company or it is mailed, in the traditional sense with a stamp and envelope. If you’re sending, say, 1,000 invoices a month, consider how much all of those paper invoices are costing you. That is a minimum of 1,000 sheets of paper and a lot of ink to go through.
If you’re utilizing snail mail instead of a fax or email, then you have additional costs to send invoices that others don’t. First, you have to purchase all of the envelopes and stamps necessary to send your invoices. Taking into consideration the current cost for stamps and envelopes, you’ll be spending around .52 cents per invoices just on the mailing supplies. If you’re sending 1,000 invoices a month, that’s $520 just for stamps and envelopes.
Team members are indispensable, however they are also the most costly portion of sending an invoice. We would never suggest scaling back your team in order to save on the cost per invoice, but it may be wise to think about your alternative options before adding to your team. This could include taking a second look at your current processes to see if your team could be more efficient or adding an automation tool to take some of the pressure of the accounts receivable team.
Every company is going to have a different cost per invoice, based on your current methods for sending, number of team members you have and the amount of invoices you are sending out a month. To find out your exact cost per invoice, you would have to do a personalized breakdown, however, it is clear that if you are sending invoices via snail mail instead of email or printing them out and faxing them, you are spending more money than necessary.