Utility industry expert Gary Sanders has partnered together with MuniBilling to help give readers an in-depth look into the world of Utility Billing Systems.
For today's Ask The Expert blog, we'll focus on the difference between hosting your bill printing in-house and outsourcing it!
Q: When the conversation of outsourcing one's bill printing comes up, the first argument is typically about the expense of doing so. Is it true that outsourcing can be more costly?
At first glance, outsourcing may seem expensive. Still, if you compare all the costs of printing your own bills, outsourcing becomes very competitive and, in many cases, less expensive than printing bills in-house.
Q: What are some of these costs associated with printing bills in-house that you referred to?
Well, there’s the cost of blank bill stock (or postcards, if you’re still printing postcard bills), envelopes to mail the bill in, and return envelopes, including the shipping costs to have them delivered.
On top of that, there are consumables, such as ink or toner, bursters or inserting machines, including maintenance contracts, and labor to print the bills.
Then there’s postage, CASS certification software, and maintenance fees for the CASS certification software. Finally, you have additional labor costs to package the bills for mailing and, finally, labor and fuel to deliver the bills to the Post Office.
Q: You list postage as an expense, but isn’t postage still an expense, even if an outsourcing vendor prints the bills?
Certainly, there will be postage costs associated with outsourcing. Still, one advantage outsourcing printers have over overprinting bills in-house is that they will often be printing bills for other companies to be mailed at the same time.
By combining all of these bills into a single mailing, the outsource vendor is usually able to group more bills to the same ZIP code and three-digit ZIP code prefixes, resulting in better discounts, which saves you money on postage.
Q: So, if it's not an issue of cost, then what about those who are worried about losing control of the printing process?
If you are reviewing printed bills to look for errors in your billing, you probably aren’t using the tools your billing software provides in the form of edit lists, exception reports, and billing registers.
If your utility is like most, you have a few large users and customers who scrutinize their bills.
To verify these bills are printed correctly, most outsource printers I’m familiar with provide a way to preview selected bills, whether it’s online or an image of the bill that is e-mailed for review.
Q: What about organizations where their board strongly wants them to maintain printing in-house?
If you have board members who are opposed to outsourcing even after you’ve made your case for outsourcing, invite them to spend time with you on bill printing day. This will allow them to see first-hand how much time and effort is expended printing and preparing bills to be mailed.
Q: Then, what would you say are some of the biggest benefits when it comes to outsourcing your billing?
The biggest advantage of outsourcing bill printing is offloading all the time and effort associated with printing and preparing bills for mailing.
All that’s left for you to do, once you’ve reviewed your billing and are at the point where you would begin printing bills, is create the export file to send to the outsourced printer and then send the file, either as an email attachment or by uploading it to their website.
Also, if you print your bills in-house on preprinted bill stock and want to change the format of your bill, you have to decide whether to defer the change until you’ve exhausted your stock of blank bills or throw out the remaining bill stock. Since most outsource printers print bills on blank stock, it’s easy to implement a form change whenever you want.
Q: Is there anything else to consider when making the decision to move to outsource?
One thing we haven’t mentioned is paperless billing or e-billing. Many outsource vendors can email a PDF copy of the bill to your customers who opt-in to e-billing, completely eliminating the cost of printing and mailing the bill.
In fact, some utilities try to offset the cost of outsourcing billing by encouraging as many customers as possible to opt-in to e-billing. If you’re interested in seeing how that might work for your utility, I have an Outsourcing Calculator on my website at https://utilityinformationpipeline.com/outsourcing-calculator/.
Gary's 40+ years of experience in the industry has granted him valuable knowledge for any billing entity. With the wealth of his knowledge, you can request an Operational Analysis for your organization from him!
You may be wondering, what exactly is an Operational Analysis? Well, it essentially is when Gary looks through ALL of your systems and interviews your team to figure out how best you can improve your billing operations.
Here are a few of your organization's systems that Gary will assess:
- Billing System
- Accounting System
- Metering System
- Service Delivery System
The end goal of this analysis is to figure out how to save your organization time and money best. This could also mean suggesting another company's platform if it's the better fit for YOU.
Gary has hosted his own blog for the past ten years. Some of his more notable credentials is that he has designed, built, implemented, and supported both ERPs and Utility Billing systems. Thankfully, he's only a hop, skip, and jump away.