Tips & Tricks
Cost Effective Measures for a Business
Have you ever wondered why some tasks take so much longer than others? If so, have you come up with solutions to reduce the amount of time required to perform the task, including cost effective measures for same?
We are all so busy within an organization that restructuring a task or activity is not a priority. However, without question, it should be.
Every month, our company generates invoices for our product and services. In the past, all invoices within the organization were sent via the postal service. We now send the majority of our invoices via email. The end result: less time folding invoices, stuffing envelopes, adding postage. Not a big deal, you say? Well, let’s take this business example and determine how much is being saved using email versus the postal service.
Monthly Invoicing Example
Let’s say every month you send 200 invoices. Half are sent via the postal service and the others are sent via email. Costs are calculated as follows:
| Postal Service | Savings | ||
| 100 Processed Invoices – Associate (i.e. 2 hrs @ $18.00/hr) | $36.00 | $18.00 | +$18.00 |
| Postage for 100 Envelopes | $45.00 | $0.00 | +$45.00 |
| Toner Usage (appx) | $15.00 | $0.00 | +$15.00 |
| Envelopes | $19.00 | $0.00 | +$19.00 |
| Paper (250 pages) | $7.50 | $0.00 | +$7.50 |
| Monthly Cost | $122.50 | $18.00 | +$104.50 |
| Yearly Cost | $1,470.00 | $216.00 | +$1,254.00 |
A savings of $1,254.00 per year for 10 years could be a savings of $12,540.00 and possibly more due to inflation.
Maximizing Savings
The same logic for invoicing also applies to accounts payable; hence the name PAYABLE. We all issue checks manually or via a computerized accounting program. Either way money is being spent on checks, window envelopes, postage, ink, and an associate’s time. In essence, we are paying an additional amount for a service or item we bought. Why should we be paying more to pay our vendors? More folks should consider paying their business liabilities via an interest free credit card. There would be time required for the initial setup of each vendor, but after that task is complete, the process should be seamless.
There are many perks to using a credit card, versus paying by check (i.e. points for travel, items, gift cards, etc.) Wouldn’t it be beneficial to select a payment method where you received a payback while parting with your funds, in addition to saving time and money on supplies?
Lastly, if there is an option to receive your vendor invoices via email, please utilize this option. This saves time, money and is eco-friendly.