Labour Cost Savings Through Invoice Automation

You probably see evidence every day that your manual accounts payable processes are

too slow and inefficient, and it may be obvious that invoice automation would dramatically improve productivity. However, before they spend company money, managers will want to see proof that, financially, automated invoice processing would be a wise investment.

According to Zona Research most organisations who use invoice automation recoup their investments within six months. These are the main areas where costs will be reduced through invoice automation.

Labour

Payment speed

Accuracy

Storage costs

Operations costs

Additional benefits

Staff cost savings through invoice automation

The majority of the costs of invoice processing are related to labour. These include time spent:

Receiving invoices

Invoice-matching

Sort and filing

Inputting

Printing, copying, faxing and posting

Searching for misplaced invoices

Resolving disputes

According to the Institute of Management and Administration (IOMA), it costs companies with a low level of invoice automation 7 to process each vendor payment. Companies with a high level of automation report reducing this to around 4.20 a saving of almost 60%.

Say your company spends 7 per invoice and processes 50,000 invoices a year, a 60% reduction through invoice automation represents an annual saving of 210,000. Many companies report seeing these savings in the first year of implementation.

Invoice automation will mean that your company is able to produce invoices more quickly and accurately so youll also save money through a reduction/stabilisation in the number of staff you need to employ and a reduction in the need for temporary staff and staff overtime.

What is invoice automation?

Invoice automation solutions include software modules (or an option for an outsourced service) which provide:

Invoice scanning

Import of EDI invoice

Extraction of header and line items

PO and GRN matching

ERP database data matching

Nominal coding

Routing and workflow approval

Posting to the ER system

Archiving

Tax compliance

Reporting

by: Sarah Cornish

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