Be clear on postage spend

Be clear on postage spend

08/27/2018

Managing costs is an important part of business. Every activity can incur a cost and, no matter how insignificant, if they’re allowed to spiral they can eat away at a company’s bottom line.

What is a business cost?

Business costs can be broken down into a few classifications:

  • Variable costs – change with the level of output e.g. ordering more supplies to fulfil a higher volume of orders
  • Fixed – remain constant regardless of output, such as rent and salaries
  • Direct – when costs are generated from the processes belonging to a specific product or service (can include both variable and fixed)
  • Indirect – costs that are not tied to anything specific. Think depreciation or administrative expenses.

Why physical mail remains an important channel

All businesses communicate with their customers and stakeholders via a number of channels. While digital channels have become more prominent over the past decade, physical correspondence remains a valuable aspect of the communications mix. Many customers prefer the tangibility of physical correspondence, and they may also be the most effective channel for reaching certain demographics. Even Facebook – known globally for its digital innovation – has recently launched a print magazine in order to reach its executive audience.

Franking machines track costs and add efficiency

How companies manage the distribution of outgoing mail can have a big impact on resources. If completed manually, it involves adding stamps to each item. This is time consumingbecomes more tedious as the volume of mail increases and can result in items being stamped inaccurately, meaning they don’t reach their destination or businesses overpay. Furthermore, the initial purchasing of stamps often requires an employee to physically go and purchase them, another drain on resources. These factors make tracking and controlling the true cost of postage difficult.

Adopting a franking machine is a relatively simple way of managing costs. Users run the envelope or postage label through a machine where it's stamped with the exact postage required. Accuracy is guaranteed via integrated weighing scales, ensuring that users never over pay. Also, franking rates are often cheaper than stamps, and local postal organisations – such as An Post or the UK’s Royal Mail – offer specialised franking services that can make costs even cheaper. Another benefit is that users don’t have to spend time queuing at the post office. Franking Machines also allow businesses to effortlessly assign costs to specific jobs or departments, enabling them to calculate the direct postage costs of a particular process.

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