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Why
Electronic Invoicing?
10 Reasons Why Your Radio Stations Need
Electronic Invoicing
Increase Radio’s
Accountability and Credibility with Advertisers and Agencies
In all business areas, customers
and consumers are demanding a higher level of accountability and integrity
from the companies they do business with. Media and advertising is no
exception. Increased pressure from advertisers on both their agencies and
their media partners is rapidly making electronic commerce the accepted
standard of transacting "back room" business functions. This is an issue
that is becoming increasingly more significant to the advertiser, agency,
and media communities. The RAB EDI Task Force was formed at the request of
the RAB Board of Directors to move this initiative forward on behalf of the
entire Radio industry.
Deal With Competitive
Pressures
The Radio industry is
significantly behind its competitors in both broadcast and cable television
when it comes to the ability to deliver invoices electronically. It is
estimated that over 80 percent of the roughly 1,200 television stations
nationwide currently are engaged in electronic invoicing at some level.
Virtually all the major cable networks and thousands of local cable
providers also have EI capability. Meanwhile, Radio’s participation in EI is
currently limited to considerably less than 10 percent of the country’s
commercial Radio stations. Given the competitive nature of the media
marketplace, can anyone doubt that our industry will lose revenue to our
competitors if we continue to turn our back on technological innovations
that those competitors have wholeheartedly embraced?
Meet Agency Demand
Our advertising-agency and
media-buying-service business partners are drowning in a sea of paperwork.
They need EI. You will be enhancing the service that you provide your
agencies by opting to do business electronically. By greatly reducing the
amount of time spent resolving discrepancies, you also will be contributing
to a more productive station/agency relationship. Although we are not yet
faced with the prospect of losing buys due to an inability to offer EI
services, in time, stations which are unable to accommodate agencies’ EI
needs may suffer financial consequences. For example, a number of agencies
threatened to impose a $100 per invoice surcharge to TV stations for the
processing of paper invoices. At some point, such threats could become a
reality.
Facilitate Quicker
Payments
EI greatly reduces the time
required for agencies to accumulate, consolidate, and reconcile the data
needed to generate invoices for their clients. Your invoice data is
distributed to agencies via the Internet within a few hours after you’ve run
billing. If no discrepancies exist, the invoice is automatically processed
by the agency’s stewardship system and then invoiced to the advertiser. The
quicker the agency gets paid, the quicker you get paid. In fact, there are a
number of agencies that now are guaranteeing payment within 30 days of all
non-discrepant invoices sent electronically. Turning sales into cash more
quickly means more dollars to your bottom line.
Minimize Human Errors
The more often human beings have
to handle and process paperwork in any endeavor, the greater the potential
for errors. Currently, every reference line for every spot contained on
every one of your invoices must be manually re-keyed into the agency’s
stewardship system. EI completely eliminates all errors caused by inaccurate
re-keying of station invoice data. Your invoices are delivered
electronically in a standardized format. The invoice data then is imported
directly into your agency’s billing system, virtually eliminating the
data-entry errors that inevitably occur when this information must be
re-keyed. Fewer keying errors mean fewer discrepancies for your business and
salespeople to deal with.
Fewer Credits and Bad Debts
With EI, agencies are able to
reconcile spots electronically. Non-discrepant station invoices are
processed into client invoices sooner, and discrepant items are flagged
immediately. By electronically monitoring the status of invoices that have
been transmitted to your agencies, you can identify potential problems soon
after billing. This allows you to take a more proactive approach to
resolving discrepancies much earlier in the receivable cycle, increasing the
likelihood that you’ll be paid. The resulting reduction in credit memos and
bad debt write-offs directly increases your broadcasting cash flow.
Eliminate Missing
Invoices
With EI, you get timely electronic
confirmation that agencies have received your invoices. Since the invoices
never travel through the postal system, there is no chance of them being
lost in the mail. Moreover, if agency personnel misplace their copy of your
invoice, additional copies can simply be printed from the invoice data
archived in their database. Your business and sales staff will never need to
spend their time copying and faxing duplicate copies of invoices previously
provided to the agency. Even better, you’ll never again have to hear the old
"I never got the invoice" excuse when following up on outstanding
receivables.
Reduce Costs and Improve
Utilization of Staff
EI saves you money on postage and
materials, as well as eliminating the labor required to print, fold and
stuff invoices. You save money not only on the initial invoice, but also on
the reduced volume of subsequent follow-up phone calls and faxes. The
resulting cost savings should more than offset the processing charges
associated with EI. In addition, while EI is unlikely to reduce your
headcount, it will definitely allow you to utilize your personnel more
effectively. Employees in both the business and sales departments will spend
less of their time resolving discrepancies and processing paperwork. This
will allow them to devote more of their energies towards tasks that can more
directly add value to your bottom line.
Take the First Step
Towards EDI
EI is just the beginning, the
first step in a revolution in the way we do business. Even more exciting
opportunities lie over the horizon on the buy side of the revenue cycle. In
time, virtually the entire order-entry process will take place
electronically. Avail requests and responses, sales proposals, insertion
orders, and confirmations all will be communicated electronically. EDI does
not eliminate the need for salespeople! On the contrary, your Account
Executives will spend less time on paperwork and more time selling. EI is
phase one of the Radio industry’s implementation of a true end-to-end EDI
solution for its sales, traffic, billing, and collection processes. We are
on our way to a truly paperless environment.
Radio Industry Benefits
If none of the above has convinced
you that your stations need to begin planning for the implementation of EI,
then do it for the greater good of the Radio industry. As the saying goes,
size matters, and you can help us achieve the critical mass necessary to
make this important industry initiative a reality by joining in this effort.
EI — it’s an Excellent Idea whose time has come — Just Do It!!!
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Radio Advertising Bureau |
