Writing the payment reminder took three minutes. Before it could be sent, however, sales operations found the purchase order, finance checked a payment and the account manager confirmed what had been promised to the customer. What did that reminder actually cost? Timing only the email measures the final step of a process shared across several teams.
For a small or medium-sized business, the difference can change an investment decision. Faster sending may bring limited value if searching for information and obtaining approvals consume most of the effort. Removing an unnecessary handover may help more than increasing the volume of automated messages. A useful calculation starts with the case’s journey, explicit internal costs and an outcome that can be checked.
Choose a unit that answers your management question
A cost “per reminder” is ambiguous until the unit is defined. Does it mean one email, one human intervention, one invoice followed for a month, or one resolved case? These are different measures. To decide how work should be organised, start with a collections case: an invoice or identified group of invoices, observed over a defined period.
Then count the interventions within that case. An accounting search, a question for sales and a customer reply belong to the same journey. Message volume can still describe activity, but it should not be the main denominator. Otherwise, sending more emails automatically lowers the apparent cost per message even when the total amount of work increases.
Separate working time from elapsed time as well. A case can wait two days for approval without consuming two full days of an employee’s time. That wait may delay cash collection, but it is not automatically sixteen hours of labour cost. Maintain two measures: actual minutes spent on the case and elapsed time before the next useful step.
Price time using a consistent internal convention
An hourly rate should reflect your business and the role involved. It can include remuneration, employer contributions and the other costs your management accounting policy includes. Agree that policy with finance and use it consistently. Do not compare a gross wage for sales operations with a fully allocated cost, including premises and software, for the account manager.
Eurostat estimates that non-wage components represented 32.3% of total labour costs in France in 2025, for its covered economic activities and enterprises with at least ten employees. This is not a contribution rate to apply directly to every salary: the denominator is total labour cost. It illustrates why gross pay alone does not represent the employer’s full cost. Source: Eurostat, 31 March 2026.
A time-based activity costing approach combines the cost of supplying capacity per unit of time with the time an activity consumes. Kaplan and Anderson describe this principle in their work on time-driven activity-based costing. For a practical diagnostic, make available capacity and consumed time explicit; do not import the authors’ illustrative capacity assumptions as a universal standard for your team. Source: Harvard Business School.
Rebuild one reminder involving three teams
The following example is entirely hypothetical. Its hourly rates are management assumptions, not sector benchmarks. Sales operations spends nine minutes on the case at €36 per hour. Finance contributes seven minutes at €48 per hour. The account manager spends four minutes at €60 per hour.
| Role in the simulation | Time spent | Assumed hourly cost | Case cost |
|---|---|---|---|
| Sales operations | 9 minutes | €36 | €5.40 |
| Finance | 7 minutes | €48 | €5.60 |
| Account manager | 4 minutes | €60 | €4.00 |
| Total | 20 minutes | Not applicable | €15.00 |
For each row, divide minutes by sixty and multiply by the hourly rate. The three minutes spent writing the email are already included in the nine minutes for sales operations and represent €1.80. Adding them again would double-count the work. Counting only those three minutes would omit the other contributions that made the message possible.
At 200 identical cases per month, the simulation represents €3,000 of capacity consumed and approximately 66.7 working hours. That is not automatically a cash saving available to the business. Employees are already being paid, and real cases are rarely identical. The figure provides an understandable basis for comparing alternative ways of working.
Find the handovers that generate additional effort
Over a short period explained to the team, record why each intervention happened: finding evidence, checking an amount, making a commercial decision, speaking to the customer or correcting an earlier error. A missing purchase order can cause several exchanges even when every reminder is well written.
Make repeat work visible. Investigating the same unallocated payment twice is different from carrying out two independently justified checks. Ask whether the second colleague could see the first person’s conclusion. The improvement may be an accessible, dated note rather than the removal of a necessary control.
Keep the diagnostic transparent. French regulator CNIL states that employee activity monitoring must be justified and proportionate, disclosed to the people concerned and subject to employee representation requirements where applicable. Design any limited collection of diagnostic data within that framework. A process-cost objective does not justify permanent employee surveillance. Source: CNIL, 9 July 2026.
For a European organisation, assess the employment and data protection requirements applying to each team. The French source above is relevant to French operations; it should not be treated as a complete employment-law guide for every country where your group operates.
Compare cases with similar levels of difficulty
A month containing many disputes will probably cost more than a month of straightforward forgotten payments. Show results by obstacle before interpreting a trend. In a separate simulation, a portfolio with 80% of cases costing €6 and 20% costing €35 has an average cost of €11.80. If the two categories later each represent half of the cases, the average becomes €20.50 even though neither category has become more expensive to handle.
Keep unresolved cases in the observation. Excluding them can make a method look efficient because it closes easy cases quickly while difficult ones accumulate. Record the time already consumed and the status at the end of the period. For unallocated credit notes, check that resolution means a verified balance rather than a reminder being paused indefinitely.
Consider sampling across several customers as well. A single unusually organised payer or an account with exceptional documentation problems can distort a short observation. Your report should explain what the sample includes, which cases remain open and where uncertainty prevents a firm conclusion.
Turn the calculation into a testable decision
Return to the 200 hypothetical cases. A revised process reduces each case to four minutes for sales operations, four for finance and two for the account manager. The cost becomes €2.40 + €3.20 + €2 = €7.60, releasing €7.40 of capacity per case. At unchanged volume, the theoretical monthly value is €1,480.
Now assume a €350 software cost and two hours of administration at €48, adding €96. The remaining difference in valued capacity is €1,034. This is neither a promised return on investment nor an automatic reduction in payroll. Identify what the released time would actually support: handling growth, reducing paid overtime that is genuinely incurred, or addressing complex cases earlier.
Evaluate debt collection software against these practical steps and the quality of the result: a correct amount, no duplicate actions and a decision that colleagues can retrieve. Lower handling cost is useful when the case remains properly managed and the customer conversation remains credible.
