Out of sight may be out of mind, but when it comes to paying telecom invoices what goes out of sight might drive you out of your mind. SAP Concur observes that “Cutting costs and boosting profits are a priority for most businesses, but many do not realize the hidden costs of simply paying the bills.”Answers to the following five questions may not be enjoyable to confront, but when you turn those answers into good solutions, you’ll be feeling far better:
• How much does it cost to prepare and send checks to make payments? Various sources say that it costs anywhere from $8 to $32 or more to process a single check to pay a single invoice. Say you pay your accounts payable staff $36 per hour full burdened and it takes them 20 minutes to validate an invoice, confirm approval, update your ERP and the payee’s portal, then prepare and send payment. That results in your cost per payment being $12. You can do the math. Then multiply by the number of payments your company makes per year. Depending on the size of your company, and your number of invoices to be paid, don’t be surprised if the result is in the millions.
• How much manpower time does it consume? The other side of this equation looks at what you could do with all that time your people are spending on bill paying. We’ve only looked at the cost of processing. What happens when there are errors which must be resolved? How much more time and expense are incurred? What could your personnel be doing to benefit your company if they weren’t taking care of getting bills paid and problems resolved?
• How often do you incur late fees? How much is that costing? Many carriers charge penalties for late payments. Between receiving a bill, analyzing it, submitting it for approval, waiting for that approval, then finally sending the bill to Accounts Payable for payment, how often do your telecom bills end up being paid late, incurring those fees? It has been estimated that the average company paying $40 million in telecom per year can pay anywhere from $500K to $1M in late fees. How many better uses can you think of instantly for that amount of money?
• How often has your carrier service been shut down due to late payment? Penalties are not potentially the worst outcome of late payments. Telecom companies, especially cable carriers, are very quick to suspend service due to extended late payment. How many surprises are nastier or more impactful than having entire departments unable to communicate with customers because their carrier shut them down? How much is that costing your company?
• How often are your payments mis-applied (no matter whose fault)? Sometimes problems come up due to no fault of your own. A carrier may mis-apply your payment. How much does it cost in personnel time and payroll to resolve mis-application challenges each month?
You May Already be 90% Along the Path to a Great Solution
Many customers depend upon MDSL to process their telecom invoices and constantly keep them apprised of new programs or carrier changes that may enable cost reductions. They have already enjoyed significant savings thanks to their relationship with MDSL.
When you examine the process you immediately notice that MDSL performs the entire invoice process right up to the actual payment of the bill. MDSL returns a list to the customer of the payments which must be processed. More than 90% of the process is removed from the customer’s operational requirements.
Go All the Way with Managed Pay
Customers who have also taken advantage of MDSL’s Managed Pay program have dramatically increased their operating cost savings.
In this program, MDSL owns the entire process, including the actual payment of all invoices. The customer is furnished with a report of all payments to be made and the funds required to pay them. These funds are transferred to MDSL who uses them to perform all the payments. MDSL incurs all the time and effort required to prepare and submit all payments.
Did We Mention That This is a Free Service?
Carriers appreciate being paid on time even more than you enjoy paying them on time!
Revisit your calculations from the start of this post and factor in that there is no offsetting fee to be paid for saving all that time and money. Zero.
It’s almost a certainty that you are now thinking that if something sounds too good to be true, it is.
MDSL offers you the opportunity to test this service. Choose a handful of accounts and put them on the program. When you are satisfied that this service provides your company with outstanding value simply start rolling the rest of your payees onto the service.
Current Managed Pay customers include major companies from the financial services, manufacturing, healthcare, and many other industries. Each enjoys an environment in which there’s zero risk and zero cost for one of their most important functions. Watch our Managed Pay video to learn more.