June 9, 2014 •Brian Watson
Not all statement processing solutions are created equal.
Sure there’s similarity in scope – they all involve ink, paper, envelopes, and variable printing, after all. And the end result is the same: a statement delivered to customers for the purpose of revenue collection.
But make no mistake, there’s a mountain of difference in the details.
A simple plug-and-print statement processing solution will still get your bills to customers. But it might take days – or weeks – longer than a best-class option. Address information might not be validated properly – increasing return mail, collection costs, and bad debt. Statements might be confusing or improperly produced. Or, potentially most harmful, subpar information security and handling standards might lead to costly data leaks.
All told, the quality of your statement print and mail approach can have a very direct affect on the financial health of your bottom line.
Throughout the rest of this post, I’ll take a look at one major point of difference between between statement print and mail vendors that has a big affect on solution ROI: the quality of their print and mail operations.
The Importance of Statement Print and Mail Operations
We’ve written plenty on this blog about the significant financial benefits of clean, clear statement design. Statements that incorporate smart, proven design consistently outperform bare-bones alternatives – helping you increase and accelerate revenue, cut collection costs, reduce billing frustration, and extend and deepen customer relationships.
But smart design, although critical, is simply one part of the overall equation for statement print and mail success. Following through with the right tools to execute your billing plan is equally essential.
Great design won’t matter much if a job sits in the processing queue for weeks on the production floor. And it’s near-worthless if bad address data keeps your billing from reaching your customers at all.
Think of a state-of-the-art race car that foregoes the Pirelli racing tires for a set of generic, stop-gap spares. No matter how well the rest of the car was engineered and assembled – best-of-breed engine, suspension, and electronics, razor-sharp pit crew, and everything tested to the point of perfection – if it all falls apart quickly when the rubber meets the road, there’s no chance to take home a checkered flag.
Groan-inducing metaphors aside, this is pretty intuitive stuff.
Don’t pay enough attention to statement design? Expect to feel the sting from diminished revenue cycle productivity over the long run. Skimp on the implementation side of things? Don’t be surprised when the enthusiasm over your smart design turns into all-out frustration and missed projections.
Finding the Ideal Statement Processing “Sweet Spot”
ROI is absolute essential. No investment makes sense unless the benefits to your business outweigh the costs of what you’ve paid. And sure that may seem like Business 101 (in fact it’s probably more common sense than financial truism).
But finding the right spot on the statement processing cost-performance scale can actually be pretty complicated.
It makes sense that low-cost vendors should provide the most attractive cost advantages. After all, there’s an inverse relationship between revenue and collection costs: the more you spend on printing and mailing statements, the less cash you can earmark for you bottom line.
But is that actually the case? Not all that often, actually. And the reason is hidden costs.
For example: if you’re paying thousands of dollars to resend undeliverable mail every month, your low, low per-unit price probably should be re-evaluated to provide a more accurate picture of true spending. Similarly, if your statement batch is backed-up up for weeks on end in production purgatory, it’s probably a good idea to find out how that affects your A/R Days.
And if you’re getting a print-out that could be produced on any run-of-the-mill, mid-nineties, dot-matrix printer, you’re probably performing less than ideally on the statement readability and customer satisfaction scale.
The Importance of Statement Processing Operations
Best-class statement processing involves a trade-off.
On one hand, solutions need to have the tools to ensure that billing is produced quickly and accurately. That mail is delivered correctly. And that sensitive customer data is kept under lock-and-key at all times. Plus the reassurance – in the form of real-time job status updates and reporting – that everything is working smoothly and according to plan.
That removes extra billing headaches, roadblocks, and stealth overhead. The kind of stuff that increases collection costs, slows receivables, irritates customers, and monopolizes the productivity of you business office staff.
On the other hand, solutions still have to be efficient. The sum of those tools has to outweigh the costs of slow, inaccurate, confusing billing. In other words, best-class statement processing solutions still have to pass the ROI test.
True statement processing efficiency comes down to solutions that offer smart, bleeding-edge statement processing tools, while appropriately sweating the “small stuff”.
Like applying a systematic mailstream approach that keeps print and mail overhead low. Or by using a production system engineered with the due diligence to prevent costly statement defects. Or by making it absolutely unacceptable to impede revenue collection by delaying production or increasing the time it takes to get statements into customers’ hands.
Statement processing solutions that check those boxes are able to provide fast, accurate, customer friendly services at a price tag that’s still more efficient than a bare bones, low cost option. Efficient statement print and mail services provide bottom-line boosting advantages like:
• Effective Piece Production and Delivery. Stated simply: your statements are too valuable to run the risk of defects, return mail, or late delivery. A tested, systematic mailstream management approach helps put statements in your customers’ hands, when you need it to be there.
• Streamlined Return Mai l Management. Skip tracing is a highly effective way to speed and automate return mail management. Instead of managing the process at your facility (which takes up key employee productivity), skip tracing sends the offending piece directly to your processor, where they can update the address data in your database and re-send a statement immediately.
• Maximum Postal Discounts. Rate sorting mail pieces provides the best postal discounts possible. Which can mean big savings (up to several cents per piece).
• Bounce the Bounce-Backs. Undeliverable mail can add up quickly. With National Change of Address database access and intelligent mail postal tracking (all the way through to piece drop-off) you get the visibility to eliminate deliverability issues before they cut into revenue.
• Fewer Defects. Skip the red-tape. An iterative, battle-tested, Six Sigma-approved production approach helps makes statement defects – or the data leaks that go hand-in-hand with mail mistakes – a rare occurrence.
• Quick Project Turnaround. For businesses that rely on deferred billing to power revenue collection, time really is money. You can’t afford to wait days or weeks (or worse) waiting for a file to be processed, printed, and mailed. That's why best-quality processors guarantee statement delivery within one business day after receiving a source billing file.
• Peace-of-Mind. Economies-of-scale, experience curves, employee-learning rates. This can all get a bit complicated. To keep things simple, you should probably shoot for large and experienced enough to provide efficient print and mail, while nimble enough to ensure your project is processed and out the door quickly.
Want to learn more smart statement print and mail strategies that improve solution ROI? Click here to download our free whitepaper The Five Habits of Highly Effective Statement Processing Solutions.