The Cost of Processing a Single Invoice is up to $30 — Here’s How to Cut That Cost by 90%

The Cost of Processing a Single Invoice

The very first invoice was a cuneiform tablet discovered in Mesopotamia, likely used to count the exchange of loaves of bread. 

Can you imagine needing to transport a clay tablet back and forth to get approvals? 

I mean, the cost to mail such a tablet would be astronomical. 

Luckily, the times have changed. As we gained the ability to write, we also created a far more portable writing medium — paper. 

Paper made it much easier to send (and process) invoices. 

Technology has progressed, yet many companies are still stuck in the stone age. (Or paper age, if you will.)  

The reality is, paper invoices could be costing your business thousands — or even hundreds of thousands — of dollars a year. 

How Much Does Manual Invoicing Cost Your Company? 

According to research firm Sterling Commerce, the average cost of processing a paper-based invoice is $30 per invoice. 

If you are still using a mostly manual invoice process, your firm is not alone. They also reported that the average AP department receives 35% of all invoices in paper form. 

How Much Does Manual Invoicing Cost Your Company

Paper invoicing costs include a range of direct costs, such as labor, as well as indirect costs, such as storage. There are also many hidden costs that many firms might not consider, such as fines levied due to errors uncovered in the audit process. 

The cost of processing invoices can vary drastically across industries and may be impacted by the overall number of invoices you process. For example, a company that processes hundreds of invoices a month is likely to get very good at streamlining the process, and thus may have a lower per-invoice cost. 

The cost can be further complicated by the fact that some firms may receive some invoices by email and others by regular mail, which can impact the cost. 

Why is manual invoice processing so expensive? 

While the average cost of processing invoices varies by company, most firms are wasting thousands of dollars on clunky, outdated processes. What are the driving factors behind the high cost of paper invoice processing? 

People Cost 

Manual paper-based tasks take time — and time is money. Paper invoices must be gathered from the mail, opened, entered into the system, double-checked for accuracy, and matched up with a purchase order. 

Only then can they be sent off for approvals, which can take weeks in some cases. Your AP employees may need to hand-deliver approval requests, reach out to multiple departments, and spend time chasing down requested information. 

All of this takes time — a lot of time. 

Paper and Postage 

Paper invoices (which are often paid by check) also incur additional costs such as checks, paper, printers, toner, and postage costs. And if your payment is about to be late due to the complicated approvals process, you might even find yourself paying for expedited postage to avoid late fees. 

All those costs eat into your bottom line. 

Storage Costs 

Invoices for AP and AR have to be kept for auditing and compliance purposes. This means your company is paying for additional square footage to store all those files. Plus, you need to pay someone to file those papers and then dig them out again to review during an audit. 

Increased Errors 

Whenever humans are involved in a process, there are bound to be errors. Even the most detail-oriented AP employee will make a mistake at some point. 

Manual data entry, for example, may introduce new errors. On the other hand, mistakes that a computer will catch, such as a changed vendor bank account, may go unnoticed by a human who processes dozens of invoices a day. 

Late Fees & Lost Discounts

Most vendors offer a discount for early payments. However, when you are relying on a clunky process, it can be a challenge to get the required approvals in time to take advantage of those discounts. Sometimes, companies get hit with late fees — not because they don’t have the cash, but simply because the approval process took too long. 

This can cost your business money in the form of late fees and lost discounts — and also impact your vendor relationship. A vendor who doesn’t trust you to pay on time is less likely to be flexible on payment arrangements. 

Increased Risk of Compliance Violations

Manual invoice processes are difficult to track and make enforcing accounts payable internal controls more challenging. For example, you may be required to save documents for a set period of time — when invoices are stored in as paper files, there are no safeguards protecting them from being destroyed before their pre-set deadlines. The lack of controls and safeguards can also increase the risk of AP fraud

How to Calculate Your Manual Invoicing Costs for AP 

The cost of processing an invoice is one of the many key performance indicators most AP departments track. But your current calculations might not consider all the costs of processing a paper invoice.  

This equation can help determine how much your AP department spends processing just one invoice on average: 

How to Calculate Your Manual Invoicing Costs for AP

How AP Automation Can Help You 90% or More On Invoice Processing Costs 

What if I told you there was a way to cut invoice processing time in half and cut invoice processing costs by as much as 93%? 


Don’t worry, you won’t have to take a pill, and this isn’t some get-rich-quick scheme. 

It’s AP automation. 

According to a recent study, the cost to process a single invoice using AP automation is just $2.13. 

That means your company could save as much more than 90% in AP costs by switching from a manual to an automated AP process. 

How AP Automation Can Help You 90% or More On Invoice Processing Costs

Cloud-based AP automation solutions, like Stampli, help reduce the time previously wasted on processing paper invoices, including manual data input, and helps eliminate mistakes, ensures on-time payments, improves working capital management, and optimizes performance. Creating an invoice processing flowchart can help identify and address inefficiencies in your AP workflows.

AP automation also reduces the costs of processing paper invoices by eliminating paper and postage fees, reducing or eliminating storage fees, and streamlining the audit process to save your company as much as 90% on invoicing costs. 

Using AP automation, you can also capture and analyze critical data to better assess your entire company’s performance. AP automation can even track accounts payable metrics to provide a truer projection of how efficient your department is as a whole. 

8 Benefits of Switching to AP Automation 

Overhauling the AP process sounds overwhelming, especially if all it will save you is a few minutes of time and a few bucks per invoice. However, there are far more benefits to AP automation. 

Here are a few other ways AP automation can simplify AP and improve overall business performance. 

  • Significant labor savings: You can save on labor costs for AP employees, but also for other staff involved in the payment and AP process, including approvers, managers, and those involved in mail delivery. 
  • More early pay discounts: A streamlined approvals process means your company will be better able to take care of early-pay discounts and build a stronger relationship with your vendors — which could result in additional savings down the line. 
  • Elimination of paper and postage costs: Say goodby to stamps, checks, and reams of paper. Once you go digital, all those costs go out the window. 
  • Improved accuracy: Manual processes are more likely to introduce mistakes. With AP automation, invoices can be imported automatically, which helps prevent costly mistakes like double payments. 
  • Increased productivity: When your AP employees spend less time on menial tasks like data entry, they have more time to focus on strategic goals, like improving spotting opportunities to save money. 
  • Reduced fraud risk: Many AP automation software solutions make it easier to spot fraud. Stampli, for example, centralizes conversations on a digital invoice, so everyone stays in the loop and is easily accessible for audit purposes.

Final Thoughts 

In addition to saving your company money on invoicing costs, AP automation can prepare your business for the future. What will your future cash flow needs be? Does your current AP process scale or will you need to hire additional AP employees? 

AP automation can help improve the overall performance of your AP department so they can focus on the future rather than drowning in manual processes. 

Ready to see how much time and money AP automation could save your business? Find out more about Stampli’s AP automation software today. 

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