Cost Factors Of Billing

Cost Factors of Billing:

• Bank Fees:
  
  Monthly fee and/or maintaining minimum monthly balances
  Statement fee
  Cash deposit and change fees (per transaction or % of amount handled)
  Check deposit fee (per transaction)
  Check return fee (per transaction)
  EFT checking and saving transaction fee
  EFT checking and saving return fee

• Credit Card (Merchant) Fees:
  
  Debit card discount rate and transaction fee
  Debit card transaction return fee
  Credit card discount rate and transaction fee
  Credit card transaction return fee or chargeback
  Credit card processor statement fee
  Credit card processor pass through fees

• Payroll and labor cost of processing payments:
  
  Creating and sending invoices
  Creating and sending EFT draft files
  Processing cash or check payments
  Posting all payments and returns
  New invoices of returned items

• Other Cost:
  
  Postage
  Stationary Cost of invoices and envelopes
  Printing cost
  Software:  initial and updates

What It Means To You:

• The highest cost billing and processing option is still much lower than the cost of handling returns and delinquencies. Offering billing and payment alternatives to your customers directly impacts returns and delinquencies.

• EFT processing from checking or savings accounts is usually the lowest cost billing and processing option. 

• The total cost of credit card processing is the sum of discount rate, per debit charge, pass through fees, statement fees, and return fees. It is not just the discount rate.

• Can you measure the payroll cost of invoicing, processing, posting and handling of returns? Whenever possible, move customers from an invoice/statement based billing program to a recurring billing program and reduce payroll cost as well as processing cost.