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Changes at the Postal Service Highlight the Importance of Paperless Billing

Posted March 12, 2013 by David Cutter

paperless billingBeginning August 5th, the USPS will end Saturday delivery of mail and 52 days will be cut from the annual delivery schedule. For utilities, this means less timely delivery of paper bills going out and checks coming in.

There is no way around it. These cost-saving measures will translate to higher costs for utilities. Most notably, utilities will face greater payment delays and higher DSO (Days Sales Outstanding); thereby, encumbering cash flow. The delays could have a particularly strong impact among the habitual last-minute bill payers, whose payments could be stuck “in the mail” and not received before the due date. This leads to an increase in service shut-offs, which carry their own set of administrative and resourcing costs.

The elimination of Saturday delivery is simply one in a continuation of efforts to bring financial stability to the Postal Service, which posted a $15.9 billion loss last year. Higher postal rates and the looming possibility of an additional 3,700 post office closings are on the horizon. Those who will feel the brunt of such changes are utilities serving rural communities.

USPS market research as well as major news organizations’ independent studies revealed that seven out of 10 Americans support these fiscal measures along with the new delivery schedule. However, billing organizations might not agree with the consensus, since their bottom line is dependent on prompt billing and payment delivery.

In the next few years, the need for highly effective paperless billing and electronic payment systems are going to become mandatory for utilities to keep costs down and service-levels high. Utilities shouldn’t wait for more challenges to present themselves, rather, they should be proactive in implementing an effective paperless billing and and electronic payment solution now to get ahead of the curve and be more prepared for what’s next.

2 Responses to “Changes at the Postal Service Highlight the Importance of Paperless Billing”

  1. Aaron Olsen says:

    Your analysis here is spot on. Thank you for helping make the argument to key decision makers on this issue.

  2. david says:

    Hi Aaron – thanks for the feedback and we appreciate your input on the topic.