Monthly Transaction Processing and Billing Insights
How Many Transactions Do You Classify Each Month?
Have you ever wondered about the efficiency and pricing of your transaction processing services? We process approximately 22,000 transactions monthly and charge around $23,000 for this service. Each client requires detailed general ledger and class breakdowns, which limits the extent of automation we can implement.
Our Monthly Offerings:
- Accounts Receivable (A/R) reconciliation between two systems
- Accounts Payable (A/P)
- Journal entries for assets and depreciation
- Payroll journal entries
- Full reconciliation of assets and liabilities
- One financial meeting per month with each client
Additional Notes:
- Currency: All amounts mentioned are in USD.
- Workload: The process requires two employees to dedicate 250 hours each month.
We are constantly evaluating whether our pricing and operations align with industry standards, ensuring both efficiency and client satisfaction.
One response
When evaluating whether your billing is efficient and appropriate, you’ll want to delve into several key aspects of your transaction classification and billing process. Let’s break this down to assess your current situation and derive some insights.
Overview of Current Operations
Efficiency Analysis
1. Per Transaction Cost
To calculate the cost per transaction:
– Total Transactions: 22,000
– Total Billing: USD 23,000
[ \text{Cost per Transaction} = \frac{\text{Total Billing}}{\text{Total Transactions}} = \frac{23,000}{22,000} \approx \text{USD 1.05} ]
This is the revenue you earn per transaction on average.
2. Employee Efficiency
Your employees work a total of 250 hours per month:
[ \text{Transactions per Hour} = \frac{\text{Total Transactions}}{\text{Total Hours}} = \frac{22,000}{250} = 88 ]
Each employee is processing approximately 88 transactions per hour combined. Considering the detailed work involved, this seems like a robust productivity measure assuming high accuracy is maintained.
3. Revenue and Cost Analysis
Now, let’s consider:
– Monthly Revenue: USD 23,000
Assuming a modest overhead cost, let’s say:
– Employee Cost (assuming average pay of USD 25 per hour and assuming additional 20% for benefits, taxes, etc.):
– Employee Hourly Cost: USD 25
– Total Employee Cost per month: ( 250 \times 2 \times 30 = 15,000 \text{ USD} )