The Cost of Doing Business? More Than $8 per Invoice

What's the true cost of doing business? More than $8 per invoice for many small businesses, according to research by etransactus, an online provider of integrated services for small businesses.

"Generating invoices and collecting payments has traditionally been a labor-intensive process that costs American small businesses millions of dollars every year," says John Jhong, chief executive officer of etransactus. "Our research shows that while the average cost per invoice is just under $8.50, the process may cost some businesses far more -- as much as $12.44 per invoice if the company doesn't use an accounting program. If you process just 1,000 invoices per year, that's an annual cost of $12,440. You could practically hire a part-time employee for that amount."

The greatest cost impact occurs for companies that still generate, distribute and process invoices manually. Traditional transaction processing includes:

* Accepting a customer order via fax, phone or mail
* Inputting the order information into the order system
* Updating the inventory system to reflect the movement of product
* Generate a mailing label, and generate and print packing lists
* Ship product or provide services to the customer
* Update the order system with the shipping date and other information
* Input data into the invoicing system, or import data from the order system
* Print and mail invoices
* Wait for payment
* Open mail and receive payment by entering key information into an accounting program
* Prepare check or money order for deposit to the bank, and make the actual d eposit
* If a payment is returned -- update the accounting program, contact the customer and wait for payment again

"Traditional invoicing and capturing payments is extremely labor intensive, expensive and inefficient," says Jhong. "The process costs the average company between $6.72 and $8.44 to create, distribute and collect payment for a single invoice. If the company doesn't use an accounting program, that range rises to $10.72 to $12.44 per invoice."

Invoicing also impacts customer service costs. "Market research indicates that 75 percent of all customer service calls from existing customers are invoice related," says Jhong. "It costs the average company another $1.66 to $2.66 to handle a single call. If a company doesn't use a customer service program that cost jumps to $5.66 to $6.66 per inquiry."

The solution, financial experts agree, is online integration of systems, especially invoicing and receiving payments. An American Express/Ernst & Young study indicates the average cost of traditional transaction processing is $90. Online solutions, like etransactus' esuite, can slash that cost to as little as $4.44 per transaction.

"Integration means keying in data just once -- eliminating costly errors and man hours," says Jhong. "Online solutions completely eliminate costs associated with printing, mailing and payment deposits associated with traditional models. Invoices are generated and distributed electronically and customers can pay their bill online, or through direct withdrawal from their bank accounts."

"Traditional billing is not only labor-intensive, it generates additional labor-intensive activities like manually receiving and posting payments, updating customer records and preparing payments to be deposited," says Jhong. "E-suite was developed to automate these tasks to increase efficiency and performance, and reduce costs, increasing the bottom line. The e-suite online solution automates the entire billing cycle."

To learn more about cutting costs with online billing solutions, visit www.etransactus.com.

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