The true cost of handling a single invoice

Written by Tobias Borthen Published 11 September 2023

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.

Paper	PDF	EHF
25 min	12 min	7 min

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:"

Manual processing, cost per format:

Cost per paper invoice: NOK 183

Cost per PDF invoice: NOK 88

Cost per EHF invoice: NOK 51

Below you will find an overview of the total cost for various numbers of vouchers annually if the work is done 100% manually:

Number of vouchers	Cost paper	Cost PDF	Cost EHF
1 000	183 000	88 000	51 000
5 000	915 000	440 000	255 000
10 000	1 830 000	880 000	510 000
25 000	4 575 000	2 200 000	1 275 000

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%!