The actual cost of processing a single invoice can vary depending on several factors. In addition to the systems the company currently uses, the cost of having employees who carry out all or parts of the processing must also be included in the calculation.
In this article, we will take a closer look at the various factors that affect the cost of invoice processing, focusing on two extremes: automated and manual.
How long does it take to process one invoice?
To determine the cost associated with processing an invoice, we need to look at the processing time. Giving an exact estimate for the time it takes to process a single invoice would be impossible.
This is due to three main reasons:
- The format of the invoice.
- The degree of automation in invoice processing.
- The efficiency of any employee who might process it.
Visma (2019), as cited in the Government (2020), has provided the following estimates on the time it takes to process invoices in the formats: Paper, PDF, and EHF (electronic invoice):
Processing time per format.
Visma (2019)
We cannot say whether your accounting staff take the same time as stated above, but it is clear that there's a lot to save just based on the format of the incoming invoice.
Having now looked at the estimated time spent on processing an incoming invoice, we will explore the cost of this process for your business.
How much does an accountant cost per hour?
Data from SSB (2023) shows that an average accountant earns NOK 56,410 gross per month. Including Employer's National Insurance contributions and Holiday Pay, this amounts to NOK 853,596 per year. This gives us an hourly wage of NOK 438*.
*Does not include any other benefits. The actual cost will be higher.
Assumptions for the calculation:
Employer's National Insurance contribution: 14.1% Holiday Pay: 12% Annual working hours: 1,950 hours
Next, based on the estimated hourly rate for an employee processing the invoices, we will estimate the cost per format:"
Below you will find an overview of the total cost for various numbers of vouchers annually if the work is done 100% manually:
So: How much can you save by automating a large part of the invoice processing?
Nowadays, it is a rare occurrence to find businesses that handle the processing of all incoming invoices manually. Most have some system in place that handles a portion of the vouchers. Yet, we see that the potential for savings, both in time and money, is significant for most.
At Compello, we claim that we can automate up to 90% of the invoice processing, and several of our most proficient customers today have an automation rate of over 90%!
We anticipate that the company: X, receives 7,000 vouchers each year. The format of these is distributed as follows:
70% EHF 20% PDF 10% Paper
The calculation would then look like this:
Savings from automation:
Are you wondering how much you can save by using Compello and increasing the degree of automation?
Try our time and cost calculator.
Sources:
Regjeringen.no. 2020. https://www.regjeringen.no/globalassets/departementene/nfd/dokumenter/rapporter/oe-rapport-2020-37-elektronisk-faktura.pdf
SSB. 2023.
https://www.ssb.no/arbeid-og-lonn/lonn-og-arbeidskraftkostnader/statistikk/lonn
