If you’re thinking about hiring a telephone answering service or switching to a new one, you may wonder about answering service cost. We typically think of expenses in terms of cost per month, but when it comes to answering services, this is not a good default position. Read on to discover why.
Rate Plan Explanation
Telephone Answering services have three components in their rate structure. The first is a fixed recurring dollar amount. No matter how often or infrequently you use your service, this charge applies.
The second element is the amount of work that this reoccurring fee covers. Though sometimes it’s in units of work, often it’s a measurement of the time spent on your account. Tracking time is the fairest and most equitable approach. (Note that some plans, at a few services, include no work in their base rate. This is something to look out for.)
The third element of a telephone answering service rate plan is the charge for additional work. Though this could be a fee for each unit of activity, most answering services charge for additional time that exceeds what’s covered in the recurring fee.
Billing Cycle Discussion
Some answering services send invoices each month. For them it’s appropriate for you to ask, “How much does an answering service cost per month?”
Other answering services, however, take a more enlightened approach, moving from a monthly mindset to a 28-day billing cycle. For them, the question becomes, “How much does an answering service cost every 28 days?”
What is the difference between a monthly mentality and a 28-day perspective? If you don’t care about money, then it doesn’t matter—not really.
But if you do care about cost—and you must since you’re wondering how much does an answering service cost—the difference can be significant.
Monthly versus 28 Days
Given that all answering service rate plans include a usage-sensitive component, each invoice will reflect the usage for that billing cycle.
Since a month can last between 28 to 31 days, this is a three day—or a 10 percent—variance from one month to the next. This means that the usage component can vary as well. But it might not be by 10 percent. It could be more.
This is because your usage for 28 days may be within the amount provided in your base rate. But if the usage for the last three days of the month pushes you over the threshold, you get billed for all that usage. The result is that your bill for a thirty-one-day invoice could be more than 10 percent higher than your bill for a 28-day invoice.
Billing every 28 days smartly avoids this painful reality of unexpected billing fluctuations that comes with monthly billing strategies.
Except for seasonal traffic fluctuations, with 28-day billing cycles you can expect to pay the same amount on every invoice.
Isn’t this the fair approach? Isn’t this the right way? Of course, it is.
How Much Does an Answering Service Cost?
To determine answering service cost, look at the service’s rate sheet. Select a package that works best for your historical or expected usage by picking a plan that covers all the anticipated work.
This base rate is what an answering service will cost you each billing cycle. It’s that simple. But if unexpected traffic occurs during the billing cycle, they have you covered. They’ll answer all those additional calls and simply charge for the extra work.
For example, assume that you will average for calls a day and each call will last 45 seconds. This means that in 28 days you’ll use 84 minutes of work (4 calls a day x 28 days per month x 45 seconds per call / 60 seconds/minute).
The entrepreneur plan, which includes 100 minutes of work, is the ideal plan for your projected usage of 84 minutes per the billing cycle.
The cost of this plan is only $79.99 each billing cycle. And (barring unforeseen changes) this will be your answering service cost.