The Bottom Line: Accounts Payable Cost Per Invoice (APCPI)
I know plenty of people dread Sunday nights, but I look forward to them. It's a time for a little relaxation and prepping for the week ahead. I also look forward to them because of this newsletter!
This week's newsletter is PACKED with good content. I had so much of it that I added in a few extra pieces in the Hit List.
How Modern CFOs Easily Optimize Travel Spending
Let's just get right to the bottom line (see what I did there?), business travel is expensive. But, you can save money on it by managing travel intelligently. Our pals over at Spendesk have a few ideas:
1) Use lower cost travel options. I'm not talking about "cheap" basic economy flights here (those can actually be really expensive). I'm thinking more about Uber, Airbnb, and similar companies. Do your travel policies allow for use of those services? If not, maybe you should reconsider.
2) Consider an automated travel policy. It's one thing to have a travel policy in place, it's another thing to actually get your employees to use it. That's where an automated policy fits in. An automated policy will help your employees book only the options that actually fit into the policy. That way there's no confusion after booking.
3) The ability to self-book. Still booking travel for your team members? Maybe it's time to consider letting them do it. It'll save you a ton of admin time, and there are tools out there to make the process easy for your employees.
4) Analyze the data. A good spend management platform will help you see exactly what you're spending money on when it comes to travel. With this info, you'll be able to find areas where you're losing money.
Best of all? Lola.com can help.
Still more to read from Spendesk...
How to Calculate Your Accounts Payable Cost Per Invoice (APCPI)
What is "APCPI," you ask? Well, that's an acronym. But, Mineraltree defines it as this: The total number of invoices paid (for a set time period) divided by all the costs incurred to pay them (for that same time period).
Basically, that just means the actual cost of paying invoices.
This number matters because your company could be losing track of a lot of money if you're not tracking this. I'll explain a little further.
Mineraltree says that processing an invoice costs anywhere from $2 - $25 per invoice. That's a massive range. If you handle 200 invoices per month, that could be a difference between $4,800 annually and $60,000 annually to process invoices.
So, if you want to get a handle on this number, here's everything you need to consider:
1) Labor Costs. Don't overlook the amount of time it takes your employees to process invoices.
2) Infrastructure Costs. You probably use some tools to help with invoice processing. Figure out how much you pay for use of those tools.
3) Physical Goods Costs. Yeah, these costs matter too. You need to know how much you're paying for checks, envelopes, printing costs, stamps, etc. Mineraltree estimates a company that processes 200 invoices per month will spend around $60 on these costs.
4) Transaction Fees. For invoices paid by check, this might not matter. But, for ACH transfers, eChecks, credit card payments, and wire transfers these fees likely make a difference.
Want more? You know what to do...
The Hit List
Here's a few things that caught my eye this week...
1) A great reminder on leadership: It's influence, NOT authority, that makes a great leader.
2) I mentioned last week that I love podcasts. Barron's just dropped a piece about 7 great finance/business podcasts.
3) Speaking of podcasts, no one has figured out how to make them profitable yet (from Bloomberg).
4) Fintech firms like SoFi and Robinhood offer "free" stock trading. What's the catch?
5) Decision fatigue is real. Here's what Jeff Bezos, Warren Buffett, and Barack Obama do to avoid it.
Pick of the Week
Some Lola love from a customer!