Contracting with a mail house to provide comprehensive, integrated billing services is more cost effective, and will give staff more time to focus on other things—like serving your customers.
Many waste haulers in the U.S. are still processing their billing in-house, using outdated methods and inadequate equipment, often at a detriment to their bottom line. When considering all costs associated with billing—materials, as well as staff time spent compiling data, printing, collating, stuffing envelopes by hand, tracking remittances, etc.—most companies are spending between $0.70 and $1.50 per statement. That means even smaller outfits with 500 customers or fewer could be losing hundreds every billing cycle.
Outsource mail houses are able to produce these same statements at lower costs because they deal with large volumes, have state of the art equipment, and usually a higher level of security and compliance. They often do very little outside of preparing statements, and they usually produce millions every month. Their systems are established and organized for that purpose alone, and are therefore highly efficient.
High volume statement processing means ordering materials in extremely large quantities. Paper and envelopes cost less when ordered by the tens of millions. Statements are produced using specialized equipment such as industrial paper cutters, folders and inserters. These machines can process several thousand pieces per day, where a human would need multiple days to complete the work. Occasionally, depending on a particular company’s set-up, all these steps can be completed in-line, thereby further reducing labor costs and minimizing human error.
Finally, as postage is the largest percentage of the average per piece statement cost, it is standard practice for mail houses to sort jobs according to guidelines set by the U.S. Postal Service. This ensures the lowest possible postage, and as a bonus, ensures the statement will reach the customer as quickly as possible.
Other Benefits of Outsourcing
Depending on the services and capabilities offered by a particular provider, below are some additional benefits of outsourcing.
Remittance Tracking
Many haulers send their customers statements in postcard format to reduce postage costs, but these often make it more difficult to handle remittances. Most postcards are missing a perforated remittance stub, along with standard tracking information like an IMB barcode and some form of scanable account number. IMB tracking allows the hauler to see when a statement has reached the customer’s address, and when the payment has been sent back. A scanable account number allows either the office staff or a bank lockbox to quickly determine to which account payment should be applied.
Both of these items can reduce the time staff dedicates to recording remittances and following up on late payments. Further, postcards are not mailed with a remittance envelope. This is fine for customers who pay electronically, but is inconvenient for those who pay by mail. Providing a remittance envelope generally increases the speed at which people send their payment, and ensures that they send it to the correct address.
Online and Paperless Services
Most billing providers now offer online payment and paperless billing options. This adds a level of convenience for your customers, cuts down on the cost of printing and mailing paper statements, and further increases the reliability of remittances.
Leaving an Impression
If your chosen mail house has a graphic designer on staff, they can use existing company branding to design a professional and attractive statement, custom inserts or anything else that could integrate into the billing process. If the mail house has variable color duplex printing capabilities, they will be able to customize certain statements—late notices, for example—to encourage quicker payments.
Environmental Conservation
The equipment and materials used by mail houses can be more environmentally friendly than standard office equipment. They provide options for using high content post-consumer materials, and commercial digital printers are moving toward dry toner, eliminating the need for alcohol and other harsh chemicals used in offset printing. Finally, the online services mentioned previously allow a reduction in paper usage and fossil fuels used to deliver paper statements.
How to Choose an Outsourcing Provider
While cost is the largest factor in choosing a mail house, the cheapest is not always the best. Depending on the specific needs of the hauler and their customers, a few things to consider are:
- How experienced is the provider? Do they understand the particular needs of the waste industry? Can they adapt as those needs change?
- Are they adaptable to the particular and changing needs of the hauler? Can they produce continually larger quantities as the hauler grows?
- Do they offer online payment and paperless billing options? Are those options user-friendly? Can staff easily manage customer requests, or will they require costly assistance from the mail house?
- Does the mail house have software developers on staff? How long will it take to receive assistance as needed?
- Do they offer statement archival? For how long? Are the archives easily accessible?
- Is there a graphic designer on staff? How large is their portfolio? Can they create unique custom inserts using the hauler’s existing branding?
- Do they simply print what they receive? Or do they offer advice on how to make communications more effective?
- What security measures do they have in place, both for their brick-and-mortar facilities, as well as for data transfer and storage? Do they perform an SSAE audit every year? Is it a stand-alone audit, or in conjunction with another company?
- Do they offer route and account tracking software? If not, can they integrate with existing software?
- Can they provide adaptive, large-print statements?
- Are all steps of the billing process fully integrated? Or would staff still spend time managing each piece of the process?
- Finally, what is their customer service philosophy? Is a live person available to answer urgent questions? How often does the phone go to voicemail? Are e-mails answered the same day?
Outsourcing Leads to Growth
Outsourcing billing processes frees up resources—both time and money—to be focused on other tasks. It assures billing and remittances will be consistent and reliable, and provides another level of convenience for customers. It is a clear and obvious step for any hauler wishing to streamline their processes, and focus on growing and improving their company.
Nick Di Spaltro is the Owner and Director of Information Technology at BMS Technologies (Bend, OR). BMS Technologies was founded as Bend Mailing in 1997, and has since expanded to provide billing outsource services to municipalities and the waste industry across the globe. Nick has a degree in Management Information Systems and is committed to keeping BMS on the cutting edge of innovation and modernization while also ensuring that clients receive the highest care and quality service. Nick can be reached at (541) 388-0789 or via e-mail at [email protected].
Case Study:
Moving to Outsourcing
Southern Oregon Sanitation (SOS) is a family-owned business in Grants Pass, Oregon. Established more than 60 years ago, they have grown to serve 30,000+ customers. Throughout the years, SOS has integrated new strategies and equipment to accommodate their growth and streamline their processes. In 2005, when their billing became too much for office staff, they outsourced to BMS Technologies.
Before outsourcing, SOS was sending 10,000 to 20,000 postcard statements every month. The costs of this production not only included paper material and toner, but it also involved the initial capital to purchase a printer which could handle such volume, printer maintenance costs, valuable staff time to organize the billing file and separate each individual postcard, and organizing the mailing per the U.S. Postal Service’s arcane bulk mail standards. At one point, SOS even purchased a third-party software platform to help navigate USPS rules, but that was yet another demand on their bottom line. And that was all just to get bills out the door. When remittances started arriving, there was a whole new set of challenges, like processing 20,000 non-standard customer-supplied envelopes.
When they first learned of BMS Technologies, then Bend Mailing Services, LLC, through another regional hauler, they were skeptical. They thought processing bills in-house, noisy and inconvenient as it may be, was cheaper than outsourcing to a technologically driven mail house. However, they quickly realized how much time would be freed up for their Customer Service Representatives. As a retiring General Manager and former SOS owner, Pat Fahey noted, “Once the billing file was submitted to BMS, we were done. They took care of the rest.” They were also surprised at the speed and accuracy of remittances. “Once the bills are out, we start receiving payments a day or two later.”
Throughout the years customers have demanded higher and higher levels of customer service. Outsourcing helps companies meet this demand. “If we have a request, BMS fills it. They’re as willing to learn as we are.” SOS previously had no online payment portal—a standard service in this age of the Internet. They’d thought about contracting out a Web site, but that would have entailed increasing server capacity, as well as security concerns over storing sensitive credit card information.
“Once we created the relationship and trust level, BMS opted to take over the online component. It was a natural fit. They worked closely with us to incorporate BMS services into our software. Having everyone in the same building—the designers, developers, everyone—means there is no finger pointing. The systems are fairly complicated, so when a problem arises, it helps having everyone work together to find a solution.”
Eleven years later, Pat still feels it was the right choice to outsource billing to BMS. “It’s one of those rare products that just works and you never worry about it.”