90% of all invoices worldwide are still processed manually.
Why do some businesses still use paper invoices, even as technology has made such advancement in recent times?
What companies need to do is first define and quantify the problem—and then evaluate how much better they could be doing with payment automation. This brings in the question of how do we truly Measure the Cost of Paper?
Broadly there are 3 costs associated:
1. Direct Costs –Relates to costs associated with Invoice preparation, Printing, Envelopes & Postage.
2. Indirect Costs - These are the expenses needed to complete a task such as, paying an employee to put invoices into envelopes. The time it takes to enter all the relevant data needed to produce an invoice. Storage/Archiving (Paper invoices cost on average $3.90 to store). Investing in cabinets, scanners. Addressing Queries, Account reconciliation and Credit Notes, IT development and operation… the list goes on.
3. Hidden Costs – There are several hidden costs when it comes to invoicing such as, costs associated to late payments. It takes days for the client to receive, review, and send back an invoice via snail mail. Recent trade payment analysis by Dun & Bradstreet shows that just 38 per cent of business invoices are paid on time. In the meantime, you don’t have the money to pay an expense and are in turn charged a late fee. Payment processing errors is another hidden cost that we need to account for. It’s been found that it costs over $50 to rectify these errors. And lastly valuable Management time is spent reviewing/addressing invoicing issues!
According to a 2016 APQC report, the cost to prepare an invoice can be as high as $11.50 or more per invoice. For a company producing 1000 invoices a month, that is $138,000 per year!
Most of these tasks can be automated which can drastically reduce costs associated with invoicing. Savings of 40% to 88% are achievable! We say, ditch the paper!
1. Yeah, it does help with the environment…
2. Yes, it will reduce cost to a great extent!
3. You may not feel it but there are a lot of small, mundane problems that are never recognised by someone who isn’t doing the same job as you. But using automation can get rid of the manual, repetitive, non-value-added tasks you are doing now!
With emSigner, you can enjoy the benefits of going paperless, where you can save money by avoiding late fees, duplications, mistakes, unnecessary storage, all the while saving time at every step!!!