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I recommend that the company consider converting to electronic invoicing, which can be
accomplished in two stages. The first stage would involve leasing a multi-functioning printer.
The second would involve reprogramming of the company’s accounting software. Printed
invoices are required to mark orders as fully booked in accounts receivable. This requires use of
the single available printer in the accounting department, which slows down processing and takes
more time than necessary to complete the work. The company is spending a significant amount
on the current invoicing process, of which there is a lot of inefficiency. Potential productivity is
being lost and the morale of the accounting employees in down. A new printer and a digital
system for the invoices would solve these issues and in time reduce costs of producing the
invoices and boost employee morale.
Problem Situation
Currently there is one employee responsible for printing, compiling, and preparing the booked
invoices for mailing. The only printer in the department is several years old and as such it runs
slow and is easily jammed. This disrupts the work of the employee booking the invoices as well
as the other employees in the department. Over the course of a week the printer jams twelve
times and takes approximately 15 minutes to fix each time. This is 3 hours of downtime each
week that could have been used to prepare the invoices. This also creates tension between the
employees with disagreements concerning who is responsible for fixing the issue when it occurs.
Most invoices are multiple pages, and it takes 1 minute to print up to six pages. At an average of
1,000 invoices per month, this equates to 16.7 hours to physically print the invoices.
Additionally, approximately 2 hours each month is directed toward preparing these invoices for
mailing.
At this time Great Slate has a small percentage of customers that demand electronic PDF
invoices, and the equipment used to accommodate their request is an antiquated flatbed scanner.
The time required for this is 8 minutes to scan and 2 minutes to compile. That is 10 minutes on
average for each electronic invoice on top of the hours needed for the printed invoices. The
requests for our company to provide electronic invoices are increasing a little bit all the time and
will in turn increase the amount of use needed of the equipment.
Task Time Spent Per Time Spent Per Time Spent Per
Week (hours) Month (hours) Year (hours)
Fixing Printer Issues 3 13 156
Printing 3.9 16.7 200.4
Scanning 7.7 33.3 399.6
Preparing 0.5 2 24
The table above shows the amount of time the invoice employee spends producing physical
invoices. Included in this is the downtime to handle the jamming issues that occur with the
printer.
The current costs for postage of the physical invoices are $0.55 each with the additional cost of
$0.05 each for the envelopes required. Monthly costs for postage and envelopes for the 1,000
invoices mailed is $600 and equates to a yearly cost of $7,200.
The time spent on these invoices takes away from other tasks in the department, some of which
have recently been delegated to fewer employees. The slow timing for completion of invoices
reduces profits by increasing costs, while the printer issues affect the department as a whole.
Proposed Solution
I suggest a two-stage solution that would require leasing the Brother MFC-L8900CDW Laser
Printer and implementing a digital PDF invoicing system.
The Brother Laser Printer will take the place of both the flatbed scanner and the old printer, as it
has capabilities to print, copy, scan, and fax. The printing speed for the Brother Laser Printer is
33 page per minute, 27 pages faster than accounting’s current printer produces. Its scanning
capability is 29 impressions per minute for single-sided pages and 58 for double sided.
In addition, the printer also allows for wireless and ethernet connectivity and can be used with
mobile devices. This will allow employees to print and scan wirelessly with NFC-capable
devices.
The scanning feature can also send the scanned pages to email, SharePoint+, network folders,
and cloud services to be easily accessible in one place. This will cut down on the time it takes to
print, scan, and compile PDFs for electronic invoices.
The total cost of the lease for the Brother MFC-L8900CDW Laser Print is $150 a month and
includes maintenance. With a three-month transition where we reduce our physical invoices each
month our savings over time will reflect a decrease in cost.
The second stage of the solution would be handled by IT and would include a billing program
that would automatically convert invoices to PDFs and email them directly to clients. This would
be something that we would need to roll out and test over several months alongside the use of the
new printer to help reduce physical invoices.
Financial Benefits
Time Frame Old Printer/Physical New Printer/Convert to
Invoices Cost Electronic Invoices Cost
1 month $600 $150 + $600 = $750
2 months $600 $150 + $480 = $630
3 months $600 $150 + $360 = $510
4 months $600 $150 + $120 = $270
5 months $600 $150 + $120 = $270
6 months $600 $150 + $120 = $270
6 Month Total $3,600 $2,700
As the table above shows, leasing the new printer and converting to electronic PDF invoices by
20% the first month, 40% the second, and 80% the third will quickly reduce costs after the initial
increases in the first two months. Once the conversion is complete, Great Slate will reduce
monthly costs for invoices by $330. These savings can be allocated to other sources within the
company.
I suggest that this transition begin immediately. We are losing time and money, and the
accounting employees are frustrated, stressed, and overworked. This new system of electronic
invoices and a new billing program will take some of the weight off their shoulders so they can
focus on other tasks. The near instantaneous delivery of electronic invoices will decrease the
turnaround time between invoice preparation and payments received. Updating the scanner and
printer will make things smoother and help ease the tensions that have been building and lead to
increased profits in time.