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Cost Savings: No Duh

I have to admit that my initial reaction to GE’s research findings that fleets are currently looking to cut costs was, “Duh”. After all, the only ways to increase corporate profit margins are to 1) increase sales or 2) decrease costs. On the fringe of the economic crisis the world has just experienced, everyone’s eyes have been on tactic #2.

But after thinking about it, I realized that there is some “there, there” as they say. The value, though, comes in asking the right questions – finding the problems and solutions that ladder up to the No-Duh statements. These problems and solutions are often not-so-obvious, which is why it’s so easy to throw a No-Duh statement like “Fleets need to cut costs” into an abyss of other meaningless statements without asking the valuable questions that lie behind the scenes.

Jenny mentioned several not-so-obvious solutions in her post last week, but I wanted to focus on one in particular this week – invoice verification. We actually published a white paper on this same topic last month, the title of which correlates beautifully to GE’s study and a not-so-obvious solution to the problem: Cost Savings through Invoice Verifications. This paper tackles the concept of corporate cost savings from an angle that most companies wouldn’t consider until more obvious corners had been cut (i.e. cutting raw material costs, slashing labor or overtime and potentially sacrificing some level of quality control).

The fact is, there are huge inefficiencies within most commercial billing and payment processes. Imagine if, in the midst of our next economic downturn, buyers were able to work with their suppliers to decrease the $3-$15 cost of processing an invoice (multiplied by tens of thousands of invoices a year) and suppliers were able to achieve the $10.1 million savings estimated possible through electronic billing automation. It’s certainly a not-so-obvious solutions to the obvious need for cost savings, but it is one that we have personally seen the trucking industry and the U.S. Government utilize with incredible success.

Cost Savings through Invoice Verifications is available to download for free here. We’d love to hear your thoughts and feedback on other not-so-obvious solutions to corporate cost savings. Billings and payments are certainly not the only inefficient business process begging for evolution.

-Martha