Your Billing Experience Costs Customers $10,000/month

Did you know customers are measuring howmuch it costs to do business with you?  It’s called Cost per Invoice(CPI).  Accounts payable (AP) uses the metric to determine how well theyare performing. It’s calculated by taking the total monthly expense incurred byAP and dividing by the number of invoices. This metric can also be computedagainst a subset of invoices to determine cost variances from one group toanother. In other words, your customers’ AP can see how much your invoicescost to process.

A high CPI is a sign of inefficiencieswithin an AP Department including overly manual invoicing steps or asignificant number of disputes to resolve.

So how expensive is it to do business withyou?  Here’s the math. The CPI for business customers to process aconsumption-based invoice ranges from $4 to $26. These ranges are a bit higherthan other CPI benchmarks due to the complexity in receiving and reviewingusage and fee data. Research also shows consumption-based billers, such astelecommunications and utilities, are lagging behind with e-invoicingsolutions. This means business customers are using offline methods to re-keyinvoice data from paper bills into their AP systems.

For small business customers, who arelikely receiving one to ten fairly straight forward invoices per month, thetotal monthly cost is $40 or less. But for enterprise customers, the costs canbe staggering. It’s not uncommon for these large corporate or commercialaccounts to receive upwards of 500 invoices from a single provider (thinkinvoicing per site or service). This brings the total monthly cost of invoiceprocessing to more than $10,000!

So no, you’re not charging your customers a$10k monthly fee, but yes it costs them that much to process yourinvoices. Just how much it costs depends on the billing experience youprovide. Do you give them the tools to quickly and efficiently validateand pay? Or do you make them do it offline with Excel?

And it doesn’t just cost yourcustomer.  It costs you too.

It’s no secret that billing and disputesremains one of the top call drivers among all business segments. Every callthey make and every day they wait is increasing their CPI and your supportcosts.

Research shows it can take up to 12 days toprocess an invoice. This isn’t due to lack of effort. It’s the manual stepsrequired to align your invoice with their processing and payment structures.And every day that passes, your DSO increases.

And what about the impact to customersatisfaction? The billing experience ranks as the top reason for customerdissatisfaction and ultimately, the search for another provider.

Businesses large and small are investing inAccounts Payable technologies to remove the manual invoice processing that iscosting them time and money. But internal enhancements can only improve CPI byso much. They’re depending on you, their service provider, to provide them withthe billing experience required to transition to a state of automation.

See how suppliers are usingGlobys Invoicing & Paymentsto provide abilling experience that simplifies the invoice process for their businesscustomers.


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