When we talk to companies, we've noticed that the majority are still keying invoice data in manually, while approving invoices through paper copy (think stamps, signatures and sticky notes) or adding invoices to a dropbox or other digital folder to be approved. Oftentimes, when learning about the payables process the response is, 'we manually enter and sign off on everything related to our payables, but our process is really dialled in.' We learn that their current process is as efficient as it could be, but consider that this antiquated process is almost like going on a road trip and finding the most efficient route. While this is great, taking a plane would be significantly faster.
According to a report by Ardent Partners, manual invoice processing can cost an organization an average of $12.44 per invoice and take up to 16.3 days to process a single invoice, even with a process that is 'dialled in.' In contrast, using an accounts payable automation tool can reduce the cost per invoice to $3.12 and reduce processing time to just 3.8 days on average. The difference is incomparable.
Let's consider a hypothetical organization that processes 500 invoices per month manually. With a cost per invoice of $12.44, the organization would be spending $6,220 per month just on invoice processing. It would take approximately 412 hours per month for the organization's employees to manually process these invoices. Using an accounts payable automation tool, the cost per invoice would be reduced to $3.12, resulting in a monthly cost of $1,560. This would represent a monthly savings of $4,660 for the organization or $55,920 annually, as well as a significant reduction in the number of hours required for invoice processing.
In addition to the direct cost savings, implementing an accounts payable automation tool can also free up employees' time to focus on more value-added tasks. By reducing the time required for invoice processing, employees can spend more time on tasks such as financial analysis, forecasting, and strategic planning. This can help the organization make more informed decisions and drive business growth. Overall, the benefits of implementing an accounts payable automation tool far outweigh the costs, making it a wise investment for any organization.