In my last blog I provided some shocking stats on the volume and continued reliance on phone, fax, email, and postal mail based business-business (B2B) transactions such as purchase orders (POs) and invoices. This leads me to a fact that I cannot ignore. In my past 7 years in this industry one of the most common questions I get from customers relates to calculating their manual processing costs of everyday business documents. As a result, I’ve worked with a number of analyst firms over the years to track down these costs while also building out a simple tool that is used weekly by companies around the globe to estimate manual processing costs.
The one thing that seems to hold true is that unless you are outsourcing manual document processing to emerging markets you are likely paying significantly more than if you would simply extend your current B2B integration investment to address these manual partners. Additionally, no matter how often we run these research programs, the cost is not changing that rapidly, continuing to range somewhere between $10-$20 per document with on average error rates around 10% and upward of $50 to resolve a PO or invoice with errors in administrative time.
Mind you none of these numbers take into account costs associated with customer satisfaction impacts, excess inventory or missed sales due to short-ships, nor missed discounts on invoice payments or lags in receipt of payment due to invoicing errors.
So focusing solely on the transactional side of things, here’s the simple questions we use to help calculate your potential:
- How many partners do you have?
- What percent are manual vs. automated?
- How quickly can you onboard new partners?
- Average number of invoices, POs, ship notices, or other docs (any or all)
- Cost info per document, leverage your own numbers or use our numbers from Forrester Research in the calculator or use more recent ones from Aberdeen Research in this paper, B2B Integration and Collaboration: Strategies for building a ROI Business case .
With these questions and about 5 minutes you can generate an 8 page custom report about your potential savings by automating more of your documents. Check it out the B2B Automation Savings Calculator for your free report.