Can Paper Bills be More Cost-effective than E-bills?

Case Study: The Cost of Direct Mail versus E-mail Invoices

Every now and then I come across a study that flies in the face of conventional beliefs. This one in particular interested me because of our ongoing campaign to remove “anti-paper” green claims used to promote “lower cost” electronic billing. It seems that the “lower cost” feature is now also being questioned by some. Let’s take a look.

In 2009, a young Danish company called Natur-Energi A/S took on a challenge to create a better communication tool that would increase the number of invoices paid on time. Natur-Energi is dedicated to locating, generating and delivering simple and effective energy supplies and solutions that result in lower CO2 generation. Their customers are, for the most part, private small- and medium-sized companies who are committed to CO2 reduction and slowing climate change.

According to an article in the August 2013 issue of Fresh Data (an online resource from Data Services), a case study details how Natur-Energi decided to test whether switching to paper invoices with a new population of customers would improve the speed of payment. The study’s objective was to establish what effect digital invoicing has on customers and whether switching to invoices sent via physical mail could improve the on-time delivery of payments with those customers. Secondly, the campaign would investigate whether digital invoices were cheaper than physical mail in regard to overall operational costs.

A test population group of 2,879 new customers was selected and their behavior through a two-month billing and payment cycle was carefully monitored. Records were kept of the type of invoice sent, date and medium of the first and second reminders, traffic to Customer Service and date of write-off.

What they uncovered is good news for the paper industry. According to the case study, evidence shows that new customers pay the required amount significantly later if they receive their invoices by e-mail, compared to physical mail. Natur-Energi discovered that sending invoices via e-mail actually increased their overall costs.

Phil has over 25 years of international experience related to sustainability and the forest products industry. He currently leads Two Sides North America, a non-profit that promotes the unique sustainable features of print and paper, as well as their responsible production and use. Two Sides operates globally in four continents with members that span the entire graphic communication value chain. Phil has written extensively on sustainability and environmental topics related to the forest products sector. He received his Bachelor and Master's of Science degrees from McGill University in Montreal. He is a private forest owner and manages over 200 acres of forestland for both recreational and economic benefits.

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  • Jill Contreras

    Interesting survey hope more businesses see this.

  • Brian Rothschild

    This deserves more than a column. In fact, I’m quite surprised PI didn’t run this a a feature. Most think that "going Green" makes you better, and in many cases it does. There are so many initiatives for forestry preservation we have enough to print on paper for the next 500 years. eBilling is convenient because we’re lazy, it cuts corp. costs and is designed for business….unless your business is printing.

  • Robert W. Bell

    Phil, thank you for sharing this with us.
    I read a study a few months ago where a company tracked the INBOUND billing statements using the IMB. They suspended collection actions normally engaged immediately for two weeks on certain accounts that were late but normally on time and saw a savings of $15,000 a month for a year.
    The conclusion was the behavior normally associated with the account was monitored and instead of having collections call, email or send another statement they waited on the IMB to track the incoming billing statement.
    Certain accounts are going to be late no matter what they do, but weather, natural disasters, moves, other mitigating factors were taken into account and the savings proved to be substantial.

  • Phil Riebel

    Thank you all for the comments…and Happy New Year.