A/P and A/R: The New Mailing Headaches You Can Avoid
- New postal changes will affect mailing in the business office.
- See what will impact you, and how you can avoid it.
Pause. If you aren’t mailing A/P checks to vendors and A/R statements to customers, this article isn’t for you, because you’ve streamlined your processes and cut out your reliance on mail.
But if you are, keep reading. Because now, the Postal Service is making changes that add to the time-consuming and costly process of mailing A/P checks and A/R statements. The good news is, these headaches are completely avoidable.
What happened with the Postal Service?
Recently, the Postal Service announced a 10-year plan aimed to tackle their massive debt. This plan includes a new delivery time standard for first-class mail and price increases on the mailing products you need. Here is what will affect you:
- First-class mail (including bills and statements) has an increased expected delivery time of up to 5 days, rather than the previous timeframe of 2-3 days.
- One-third of all first-class mail will be affected by those delays.
- First-class stamps increased 3 cents and pre-sorted letters increased 2.9 cents, bringing the prices to 58 cents and 43.3 cents, respectively.
At first glance, these changes may seem small; even small enough to consider eating the additional costs and dealing with the delays. But the impact this will have on A/P and A/R is greater than it seems.
How does this impact your business?
Let’s look at the additional costs. If you are mailing around 100 statements and 250 A/P checks per store, the stamp expense alone is setting you back close to 195 dollars each month. When that expense increases by 5.5%, and you factor in your additional stores, you’re spending thousands per year on postage alone, which is only one piece of your overall mailing expense.
And it doesn’t end there. The Postal Service released a statement saying they plan to start bi-annual price increases in July and January of each year, starting in July of 2022. Are you prepared to spend even more on your mailing costs?
Additionally, delivery delays will put your cash flow at even higher risk. It is already hard enough to maintain control over cash flow when it’s floating around in the mail. These delays only force you to mail out more of your monthly expenses at once to ensure payments aren’t late, and increases the uncertainty of when customers will receive their invoices and remit payments.
How can you be 100% certain your check will arrive on time? Or your customers’ payments will get back to you before the end of the month? You can’t, which puts your cash flow at risk, opens you up to late fees or penalties, and slows down a critical inflow of cash.
So why continue to use a method that will be increasingly more expensive, outdated, and risky for cash flow if there’s a better alternative?
What can you do to avoid these changes? Digitize processes.
Instead of mailing invoices to your customers, send them an email with the same information in a digital format. Emailing invoices makes the process substantially faster for both you and your customers. They receive their invoice through a method they prefer, and you can get your money faster when customers have the option to pay their invoice online directly from the email.
When it comes to paying your vendors, rather than mailing out checks in batches once or twice a month, pay your vendors electronically throughout the month. Rid yourself of hours spent manually stuffing and mailing envelopes and put the control of cash leaving your dealership in your own hands.
The reality is, first-class mail volume has declined by 32% in the last decade due to the transition from mailing to electronic payments and communications. Why stick around for price increases aimed specifically to offset their decline in revenue?
Mailing A/R statements and A/P checks to vendors is becoming more and more antiquated. An already costly and unreliable method is now becoming more costly and more unreliable. It’s time to ditch mailing and embrace a more efficient, customer-friendly method to cash flow.
By digitizing your processes in A/P and A/R, you not only avoid the headaches of the postal service changes, you save time and money by reducing or eliminating the need for physical mailings, you offer customers and vendors a better experience, and you put the control of cash flow in your hands.