How much does AP automation cost per invoice? What would it cost to automate your customer orders too?
Industry research firms analyze typical costs for a company to process an AP invoice in-house. I find it fascinating that based on where you are in the country and your labor rates, it likely costs your company somewhere between $15 to $40 to process and pay each invoice.
AP automation services companies allow you to bundle your invoices and ship them overseas. People manually enter them into a file that is then uploaded into your ERP system for posting. I have seen these services quote as much as $5 per AP invoice.
I’d say 5 dollars versus 15 dollars per invoice is a pretty compelling case from a pure cost standpoint.
Here is where it gets even more interesting. There are similar industry statistics about the cost of entering customer orders, and they found that a typical order can cost somewhere between $40 up to $1,000 just to get it into the ERP system.
I’ve been doing this for 30 years, and the first time I saw that $1000 number, I thought it was ridiculous. Then I calculated that some orders have 30 pages, $10 per line, multiple line items, and how long it would take somebody to manually type it into the ERP system. Then it doesn’t sound so expensive.
Or think about a product that is “engineer to order” where there’s a lot of back and forth between engineers, salespeople, and the customer. I can see how that become very expensive.
The cost of DaaS is also done per document, based on the complexity of the document being automated. If you have a large volume, you could be paying as little as $1 or $2 per invoice or order.
One of the companies we work with used internal metrics to pinpoint that they had a salesperson spending 20% of their time each week entering orders. Isn’t it worth $2 per invoice to take that off his plate so he can focus on actual sales?
DaaS can make things faster, more efficient and provide proof that the increase in productivity gives a return on investment.
The Automation Calculator
Our automation calculator can show you how long it takes your company to process an invoice or order internally and what that costs. Then we can compare that with the cost of automation.
It is easy to prove the return on investment.
To use our automation calculator to see how much money you could save each month,
By Peter Joeckel, HandsFree,