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In today’s fast-paced world, managing finances efficiently is more critical than ever. One area where companies can often find significant savings is in their invoice processing. Traditional methods, with their reliance on manual data entry, paper trails, and slow approvals, can be time-consuming and costly.
Fortunately, modern technology offers a game-changing solution to streamline the process, reduce errors, and ultimately lower invoice processing expenses.
The global invoice processing software market, valued at USD 27.73 billion in 2023, is projected to reach USD 33.59 billion by 2024, growing at a CAGR of 21.1%.
By 2028, the market is expected to reach USD 72.66 billion, driven by the shift to digital invoicing, OCR technology, and increased demand for automation, particularly in the e-commerce sector.
In this blog, we will explore how businesses can leverage digital tools and automation to create a more cost-effective and efficient invoicing workflow.
Having explored invoice processing costs, let’s see what the average cost to process an invoice is:
Research shows that businesses relying on minimal or no automation for invoice processing can face costs of over $10 per invoice. In contrast, companies with well-optimized accounts payable processes and little to no manual intervention generally spend $2 or less per invoice.
According to data from the American Productivity & Quality Center, companies could cut their accounts payable costs by as much as 80% by implementing automation solutions.
Performing a detailed cost-per-invoice analysis is a key step in highlighting the value of AP automation technologies to senior management.
There are 4 important factors that contribute to higher invoice processing costs:
To assess invoice processing costs, organizations should factor in both direct costs (software fees, IT maintenance, late penalties) and indirect costs (inefficiencies, manual processes, training gaps).
Calculating the average cost per invoice involves dividing total AP expenses by the number of invoices processed. Identifying and addressing these costs can improve efficiency, reduce expenses, and enhance profitability.
In conclusion, adopting modern technology and automation in invoice processing helps businesses reduce costs, improve efficiency, and strengthen vendor relationships. By moving from manual, paper-based systems to digital solutions, companies can streamline workflows, minimize errors, and reduce fraud risks.
Platforms like InvoiceTemple make invoice management more cost-effective and efficient, contributing to long-term savings and improved operational performance.