Defining the average cost of processing an invoice from Purchase to Payment is difficult to determine as every business includes different cost components in the Purchase to Payment cycle.
Cost studies undertaken to-date show a range of cost results, but a consistent return is from $4.00 per invoice for best of practice with advanced automation & OCR (Optical Character Recognition), $9.60 with low/partial automation, through to $23.00 with no automation.
The biggest stumbling block to accomplishing any form of Accounts Payable automation is a continued reliance on paper based invoices, and people based processing.
Labour costs typically consume 60-65% of total Accounts Payable costs. By contrast the efficiencies that can be gained by OCR automation in Accounts Payable processing are dramatic by any measure...
Process 100% of invoices - hand written and computer generated invoices.
90-95% reduction in paper - environmental impact
Document storage - secure document and data storage
Reduction in physical document storage space required - efficiency gains & cost savings
Invoice original archiving - secure, easily accessible document reference
Reduction in invoice processing time - take advantage of prompt payment discounts
Up to 25% improvement in labour costs and productivity - efficiency gains and cost savings
Faster invoice payment approvals - reduces the number of days to process an invoice
No lost invoices - cost & time savings in requesting copy invoices
No invoices paid twice - cost & efficiency savings
Accurate accruals - reliable reporting
24/7 visibility of invoice status - more immediate management decisions
Seamless workflow integration - work flow efficiency