Blog|6 min

The ROI of accounts payable and accounts receivable

Siri, do my invoicing.

Hey Alexa, pay my bills.

Wouldn’t it be nice if your business had these options? A task that takes hours could reduce itself to just a few seconds.

So maybe we’re not completely there yet, but that doesn’t mean you can’t amp up your accounts receivable (AR) through modern means. Automation, ACH transfers, and recurring invoicing & payments are just a few technology-fueled approaches that have a tangible and meaningful return on your investment.

The ROI of accounts payable

According to the National Clearing House Association (NACHA), roughly half of all business payments rely on checks. Whether handwritten or computer-printed, checks represent the enemy of efficiency and value. They demand more time, effort, and money to support. Don’t believe us? Let’s look at the numbers.

What if you could cut your bill payment costs by 95%?

Breaking it down—you have 500 bills a month to pay and need three employees to help. This is what the cost looks like:

  • Average cost of employee time spent on paper checks: $1,280
  • Cost of supplies such as check stock, envelopes, stamps and more: $150
  • Bank fees: $380
  • Postage: $235
  • Total for the month: $2,045
  • Total for the year: $24,540

Now, if you eliminate paper checks in favor of ACH payments, EFTs, eChecks, and automation through BILL, your numbers would change significantly.

  • Average costs of employee time spent on digital business payments: $70
  • Materials: $0
  • Bank fees: $70
  • Postage: $70
  • Total for the month with digital payments: $140
  • Total for the year with digital payments: $1,680

But why the vast drop off in cost? By using BILL, you replace paper with digital processes. You’re introducing automated workflows, online business payments, and electronic document management—all measures that cut down on the cost and time associated with bill payment and accounts payables.

BUT I already pay my bills electronically!

First off—that’s good news! You’re already a member of the digital bill payment revolution. But how exactly are you paying electronically? Through different vendors’ systems? Maybe via online banking? While these options embrace digital payments, they may not meet the requirements of a business. You may find you still spend time and money on extra steps.

For example, when you make payments via these means is that information syncing with your accounting solution?  Or do you have to manually enter information? Or worse yet, print and file associated information for documentation? If your bill payment process isn’t fully digital, “paper leaks” can lead to more expenses and labor.

The ROI of accounts receivable

But what about invoicing? How expensive are paper invoices?

Let’s take the model above and apply it to invoicing. You send 500 paper invoices a month for your company and need three employees to support the process. You would be facing costs like the ones above—and maybe even higher.

However, when you invoice with BILL, the process changes remarkably.

Paper is completely eliminated. Invoices are pre-populated with the correct remittance information. You can review the invoices before they are sent or have them sent online. Even better, BILL can collect payment automatically when it sends the invoice.

Let's take a second to consider that.

With a paper-based AR process, the cycle for an invoice could look like this:

  • Your team creates and prints the invoice.
  • They stuff and mail it.
  • After 3-5 business days, your customer receives the invoice. It takes the company another 2-3 weeks to receive, review, and authorize payment for it.
  • They mail you the check.
  • After 3-5 business days, you receive the check.
  • You run to the bank to deposit the check.
  • After a couple of days, the check clears.
  • You reconcile the amount manually with your accounting solution.

With BILL, the process would look like this:

  • On the selected day of the month, an invoice is automatically created and electronically sent to your customer.
  • Since the customer has agreed to recurring payments, payment is collected that same day OR the customer receives the invoice immediately upon emailing and can pay online in a few taps or clicks.

As an added bonus, customers can review the invoice online and collaborate with you via a secure portal. In the end, the BILL AR process eliminates the need for excessive labor, extra costs, and long waits. Believe us, your cash flow will thank you.

It’s time to see the ROI of AP & AR.

You can learn more from our customers here.

The information provided on this page does not, and is not intended to constitute legal or financial advice and is for general informational purposes only. The content is provided “as-is”; no representations are made that the content is error free.


Related Articles