Is the high cost of producing payables running away with your bottom line? Independent research with companies that have studied the costs associated with their payables has revealed that costs range from $15 to $25, and even up to $50 or more to issue each cheque.

Often the hard and soft costs associated with cheque requisitioning, authorization, postal expenses, reconciliation, tracing, and security issues are not recognized. A thorough analysis will often reveal savings opportunities in the three major areas in which these costs occur:

Direct Costs

The most obvious 'hard dollar' costs associated with cheque issuance include the cost of blank cheques and envelopes,
bank transaction charges, postage and/or courier expenses. Outsourcing or replacing issued cheques with Electronic Funds Transfers can reduce or eliminate many of these direct costs.

Clerical and Handling Costs

The largest costs are clerical and handling. These can be determined by examining how much time it takes to perform tasks and the cost of the labour involved. Employee salaries, benefits, and time off are all factors that must be taken into consideration when calculating total labour cost figures. Based on industry standards, we have assumed the average cost of labour to be $0.40 per minute for clerical staff, $0.75 for supervisory staff, and $1.00 for management.

Opportunity Costs

Opportunity costs can be substantial. Penalties for late payment, the costs of paying before funds are due, and missed discounts that many suppliers offer for prompt payment are prime examples.

Use our Cheque Issuance Cost Calculator to discover savings opportunities in your payable operations.