Electronic billing has green benefits and financial advantages
Arbor Day will soon be upon us. Is that important to your business? Maybe you’ve never thought about it.
More specifically, you’ve probably never thought about it in terms of your accounts receivable department. When we think about Arbor Day, we generally think of planting trees, recycling and sustainability. Maybe you’ve thought about “going green,” too.
Sustainability programs typically require companies to spend money, not save money. Surprisingly, your A/R department is one place you can “go green” and “save green” at the same time.
Through automation, it’s easy for your business to take the right steps in going green. By reducing, or completely removing, paper-based billing through automation, your company can drastically reduce its environmental impact. One of the biggest issues any company faces when going green is how to message it to their customers. While going green may be important to you, it may not resonate with them. Make sure your messaging focuses on speed, convenience and availability.
For every million dollars in revenue, businesses average 7.8 metric tons of waste, according to the U.S. Chamber of Commerce. Out of that waste, nearly 40% is easy-to-recycle paper. According to the accounting firm Coopers & Lybrand, there are more than 4 trillion paper documents in the U.S. alone, and this number is growing at a rate of 22%, or roughly 880 billion paper documents a year.
Do your customers still send you paper checks? It’s estimated that Americans still send more paper checks than any other country in the world, according to research from the Bank of International Settlements. About half of B2B payments were still being done by check as recently as 2016, according to the Association for Financial Professionals.
Maybe more important to your business, however, is that billing and payments automation can help you save both time and money while accelerating your cash flow. It’s the simplest and most cost-effective way to go green. So, what does automating your A/R process look like? It means taking steps to send invoices to customers electronically through email or an online portal; establish an online portal through which customers can self-service to check current and past invoices or make payments that match up with their invoices; and set up the ability to accept payments electronically, through ACH, wire transfer, credit card, etc.
These are some significant behavior changes for your customers, for sure, but you might find them more ready to adopt them than you think. After all, most of them are already managing their B2C activities with electronic bills and electronic payment vehicles like Apple Pay and Google Wallet.
In addition, you cut down the time for customers to receive invoices and for your business to accept and apply payments, thereby accelerating your cash flow and creating a healthy, growing business. By cutting unnecessary paper cost, your company will also drastically reduce spending, which in return will improve bottom lines at the end of the year.
In 2016, the Chamber of Commerce interviewed more than 5,500 U.S. companies and found that by eliminating only one percent of paper usage, these businesses had the potential to save almost $1 billion. With billing and payments automation, for example, a company called Johnstone Supply was able to save big from not having to account for mailing costs anymore. Automation will also save money by opening up billable time for A/R departments, allowing those employees to use their time in a more cost-effective way.
Going green doesn’t have to be a huge corporate process with bells and whistles and with hoops to jump through. With billing and payments automation, companies of all sizes can take steps to becoming more environmentally friendly while positively impacting the bottom line.