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magazine
10
Cover Story
A first class
frank costs
less than a
second class
stamp.
To work out the annual savings you
can expect by switching from stamps
to franks, download Neopost’s free
Postage Saver app for the iPhone. Just
follow the link on www.neopost.co.uk.
Free trial
Franking doesn’t just save money: it is
also more convenient, secure, accurate
and professional than using stamps (see
below). Today, even entry-level franking
machines come with impressive, time-
saving features.
Neopost’s neat and compact
Autostamp 2, winner of a
Business Info
Editor’s Choice award, has an integrated
weighing scale and on-screen rate wizard
to ensure you always apply the correct
postage, and a LAN connection for 24/7
postage re-crediting, remote diagnostics
and automatic postal rate changes.
Experience the benefits of franking for
yourself with Neopost’s free 30-day
AutoStamp franking machine trial.
On April 30, Royal Mail increased the
price of a 1st class stamp by 30%, from
46p to 60p, and the price of a 2nd class
one by 39%, from 36p to 50p. Costs
for franking also rose but, in line with
Royal Mail’s strategy since 2005, at a
significantly lower rate – 13% for a 1st
class letter (39p to 44p) and 10% for
2nd class post (28p to 31p).
As a result, the gap between the
cost of a stamp and metered mail has
widened so much that a first class frank
costs less than a second class stamp.
With savings of 16p on every 1st
Class letter and 19p on every 2nd Class
letter, the break even point at which
savings on postage cover the costs of
franking machine rental and consumables
has now fallen to just five letters a day.
This makes franking an economical
option for small and micro businesses
such as garages, dentists, doctor surgeries,
garden centres, plumbers etc. that in the
past might have considered metered mail
beyond their means.
Franking is now the most economical and productive option for
businesses sending as few as five letters a day.
A mark of
intelligence
The more you send, the more you save
The cost-savings and efficiency gains
from franking are even greater for
organisations with larger mail volumes.
Businesses sending between 500 and
25,000 letters per mailing using Royal
Mail Business Mail (previously Cleanmail,
Mailsort andWalksort) can enjoy extra
discounts of up to 23.5% on the cost of
franked mail.
In order to qualify for discounts, mail
must be addressed in a way that can
be read by Royal Mail sorting machines
using approved OCR-readable fonts or
barcodes containing the postcode and
delivery point. The level of discount
depends on factors such as the number
of letters sent, how the mail is addressed,
addressing accuracy and whether mail is
unsorted or pre-sorted by the customer
into specific postcode areas.
VAT Reclaims
Another recent change in the pricing of
Royal Mail products is the imposition
of VAT on retail mail services, bar those
subject to the Universal Service Obligation
i.e. 1st and 2nd class post. Introduced
to provide fair competition between
all postal service providers, VAT is now
applied to Business Mail and many other
services including Special Delivery 9am.
This is not so much a financial burden
as an administrative one, as VAT-registered
businesses can claim back the tax. The
process is made much easier using the
latest generation of Neopost VAT-
compliant IS smart franking machines.
Neopost IS Smart franking machines
frank at VAT-inclusive prices and
produce VAT invoices to aid reclaiming.
Other benefits
Substantial cost-savings, easier
compliance with the requirements of
Royal Mail discount schemes and simpler
VAT accounting provide a compelling
case for franking, but there are many
other reasons why businesses of all sizes
should invest in a franking machine:
No more queuing.
Franking machines
can be re-credited with postage online at
any time of day or night, saving you the
time and trouble of queuing up at the
Post Office counter;
No over-stamping.
Automatic tariff
updates and Neopost’s on-screen rate
wizard ensure that you always apply
exactly the right postage. This eliminates
unnecessary costs from over-stamping