Investing in invoice automation is as close as can you get to a sure thing in business. The ROI of using invoice automation is high because the returns are large and the investment can be relatively, small especially when you use a cloud-based software subscription.
Most invoicing is still done manually even though the cost is high. Estimates of the cost to manually create and mail a customer invoice range from $10.00-$40.00 per invoice depending on the complexity. Invoicing is one of those low profile, back-office necessities that doesn’t get the attention it deserves, but the ROI of using invoice automation will make people sit up and pay attention to the opportunity.
RETURN ON INVESTMENT
Savings from fully automating invoicing are estimated at 30-80%, resulting in costs of less than $5.00 per invoice. The cost savings come from reducing or eliminating the direct and indirect costs of processing and mailing invoices.
With fully automated invoicing you can use features like the following to reduce costs and increase cash flow.
- Invoice templates – eliminate repeated invoice creation from scratch
- Email and text invoice copies – save postage and processing costs and reduce delivery time
- Links on invoices – speed collections with online payment options
- Reminder emails and text messages – reduce collection calls and increase cash flow
Direct costs in the form of printer supplies, envelopes, paper and postage will be virtually be eliminated. Indirect costs of personnel and overhead may or may not be reduced, but at a minimum these resources can be used in other more productive activities.
Opportunity cost savings from invoice automation can be even greater than the reductions in direct and indirect costs. It probably takes you two weeks or more to process, mail and deliver an invoice to a customer if you invoice manually. The cost of the cash tied up in a manual transaction cycle can be substantial. With automated invoicing you can significantly reduce the invoice transaction cycle and increase cash flow correspondingly.
The benefits from reductions in direct, indirect and opportunity costs and the increases in cash flow add up to a significant return on investment.
The investment side of the ROI equation required to automate invoicing is probably less than you would expect, especially if you use a cloud-based software subscription.
- Software – periodic subscription payments instead of upfront software purchase
- Hardware – little or no additional hardware required with software subscription
- Installation and training – Software is user friendly, making training easier and less costly. Installation depends on experience of software provider/partner.
The ROI of using invoice automation should exceed even the most demanding investment criteria. The returns on investment should be substantial and the investment less than you expect, especially if you use a cloud-based subscription.
When you automate invoicing you should partner with an experienced software provider with a history of successful invoice automation.
Lockstep Collect is a leader in cloud-based and premise-based software solutions made especially for businesses selling on credit.
If you would like to learn more about how you can benefit from invoice automation, please contact Lockstep Collect at www.lockstep.io