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TRUE COSTS FOR THE COMPLETE BILLING CYCLE
Virtually
all small, medium and some large businesses utilize the standard method
of distributing invoices and statements to their customers via the United
States Postal Service. This is labor intensive, expensive and inefficient,
and creates other labor intensive activities such as: manually receiving
and posting payments, updating the customer records and preparing payments
to be deposited into banking institutions. 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,
which until now, has been handled manually. See Exhibit 1 - Traditional
Method for the process flow of sending and receiving payments for more
information.
Exhibit
1
Traditional Method for the process flow of sending and receiving payments
- Accept order from customer via fax, phone or mail;
- Input order information into order system;
- Update the inventory system;
- Generate mailing label;
- Generate and print packing lists;
- Ship items or provide services to customer;
- When complete update order system and enter ship date and etc.;
- Input data in to invoice system, or import data, fill in the necessary fields, the data can also be auto populated with more sophisticated systems;
- Print multiple copies on invoice (one to be mailed and one to be filed);
- Place into envelope;
- Affix postage;
- Mail the invoice, most companies have standard time intervals as to when invoices are generated and sent to try and increase efficiency and productivity. (Based on recent surveys, many companies prepare invoices once a week.);
- Wait for payments;
- Open mail and receive payment;
- Enter payment amount, date, invoice number into accounting program;
- Prepare check / money order to be deposited into financial institution;
- Physically deposit payment into financial institution;
- In some cases payments will be returned for non-payment;
- Open mail and receive returned payments from the financial institution;
- Update the accounting program;
- Contact customer via phone, mail or fax;
-
Wait for new payment and start the process over again.
As
evidenced by the aforementioned steps, invoicing and capturing payments
is extremely labor intensive, expensive and inefficient. It is estimated
that it costs the average company between $6.72 to $8.44 to create, distribute
and collect payment for a single invoice. See Exhibit 2 – Summary
Cost Comparison for more information.
For the example in Exhibit 2, assumption is made that the company possesses
and utilizes an accounting program to minimize some manual labor tasks.
If the company does not utilize an accounting program the costs would
be increased by approximately $4.00 per invoice, bringing the total from
$10.72 to $12.44 to capture payment for one single invoice.
Customer service is another category which reduces profits for all companies. According to surveys and market research, 75% of all calls from existing customers are invoice related. It is estimated that it costs the average company $1.66 to $2.66 to handle a single call from their customers. See Exhibit 2E for more information.
If a company does
not utilize a customer service program, the costs would be increased by
approximately $4.00 per call, bringing the total to $5.66 to $6.66 per
inquiry.
Further, a report published by American Express/Ernst & Young, indicates
the average cost to process a single transaction is $90.00. See the following
report - Costs of Traditional Vs Online Purchasing Processes in (USD)
Costs
of Traditional Vs Online Purchasing Processes in (USD)
Based on both studies conducted by American Express/Ernst & Young and etransactus, the cost savings to companies is substantial and would provide for an immediate increase in profits for any company who utilizes our online solution.
Exhibit
2A
True Costs to Capture Orders Comparison
Exhibit
2B
True Costs to Send Invoices and Statements Comparison
Exhibit
2C
True Costs to Process Payments via Check & Money Orders Comparison
Exhibit
2D
True Costs to Process Payments via Credit Card / Debit and EFT Comparison
Exhibit
2E
True Costs for Customer Service Cost Comparison
ABOUT ETRANSACTUS, LLC
etransactus, LLC is a leading provider of automated billing solutions.
The company through it e-suite™ product and it offerings provides
an end to end billing, payment processing, time, customer service &
support, inventory, staff, expense, purchase order, document & File
Sharing, and Credit management from a single web based application which
offers a comprehensive solution for all companies regardless of its vertical,
with emphasis on the small to mid-size companies. For more information,
contact (908) 916-5216.
Cautionary
Statement
Statements contained herein which are not historical information are forward-looking
statements. Such statements are subject to certain risks and uncertainties.
Actual results could differ materially from those included in the forward-looking
statements for a variety of reasons, including the level of acceptance
of e-suite™ product by the marketplace, the ability of
the product to achieve the results for which it is designed, the ability
of the company to raise capital to fund operations and marketing programs
for this product, competition from other approaches to automate billing
solutions and other risks described in the company’s communications
with investors. These statements are not guarantees of future performance
and readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. The Company
undertakes no obligation to update publicly any forward-looking statements.