The cost to answer vendor and internal invoice inquiries can add up quickly. Whether your organization has a dedicated customer service staff or AP team members are balancing customer service duties with other tasks, there is often a big cost to this that is not always included in the calculation of cost per invoice.
But, in reality, it can be an expensive cost of processing invoices.
Costs include salaries, benefits, taxes, equipment, supplies and training for the customer service team, plus their manager’s time. When you have AP staffers balancing customer service with other tasks, workflow is interrupted and errors can be made. In addition, dealing with difficult vendors can be upsetting and stressful for the AP team member and wreak havoc in the department.
By automating customer service via a self-service portal, as much as 80% of your inquiries can be handled online 24/7 and drastically reduce calls, emails, interruptions and productivity drain.
If you want to make a case for a vendor self-service portal in your organization, metrics and benchmarking are vital tools to help you make your case. You need to understand the metrics (where you are currently) and compare those metrics to what other companies are currently doing (benchmarking) to assess what your organization could be doing.
What Does it Cost to Answer Queries?
This is a difficult question to answer for most companies. According to a recent survey conducted by The Accounts Payable Network, 89% of all companies that participated in the survey do not track the length of time of customer-service calls. Without knowing how many calls are handled by AP and how long each of them are, it is impossible to know precisely how much your organization will save by implementing a portal.
Invoice inquiries at large organizations are typically handled by a dedicated customer service team that only responds to vendor and internal requests for invoice inquiries. For those organizations, it is much easier to calculate the cost savings and productivity improvement potential of a self-service portal. However, smaller companies may require all employees to balance customer service duties with other day-to-day tasks, making the amount spent on servicing inquires much harder to calculate.
On average, 11% of all invoices are inquired on. Here is an example of how much customer service could cost for a typical organization.
|Invoices Processed per Month||10,000|
|% of Inquiries on Invoices Processed||11%|
|Total Inquiries per Month||1,100|
|Average Time to Handle a Query||8 Minutes|
|Hours per Month to Handle Queries||146|
|Cost per Hour||$20|
|Monthly Cost to Handle Queries||$2,920|
As you can see from this example, the cost to service vendors and internal staff can be very expensive. If you want to demonstrate to your executive management team why they should invest in a vendor self-service portal, you need to be able to calculate how much you are currently spending or at least have benchmarks of what other comparable organizations are spending. If you don’t have this information readily available, start capturing it so you can make your case to slash costs and increase productivity in your department!
To see how InvoiceInfo’s self-service solutions can benefit your operations and your company click here to request more information or call (678) 335-5735.