Cost per invoice calculator
Borrowing an industry benchmark is guessing with extra steps. This builds your own number from the four components that make it up, and shows which one is actually costing you. For most small businesses it is not the one they expect.
Your inputs
Open, download, key, code, attach, save.
Employer taxes, benefits, insurance. 25 to 30% is typical.
Annual value of 2/10 net 30 style discounts not taken.
Your fully loaded cost per invoice
$3.23
$388 per month, $4,654 per year, at an effective loaded rate of $36.98 per hour.
Where it comes from
- Direct labour
- $2.16 (67%)
- Software
- $0.24 (7%)
- Error correction
- $0.83 (26%)
- Opportunity cost
- $0.00 (0%)
Published benchmarks, for context
These surveys skew toward organisations with dedicated AP departments, so a small business number below the average is normal rather than suspicious.
- Best-in-class, automated$2.78
- Average across organisations$9.40
- Heavily manual$15.50
The four components, and which one to fix
Most people count only direct labour, which is why informal estimates come in low and automation looks less compelling than it is. The components behave differently:
- Direct labour is the visible cost and typically 60 to 75 percent of the total in a manual process. Automation cuts it by 60 to 80 percent.
- Software goes up when you automate. Count it honestly.
- Error correction is the component most often left out and the one that most often exceeds labour on a bad month. Duplicate detection is where automation earns its keep quietly.
- Opportunity cost is the wild card. A 2/10 net 30 discount not taken is an annualised cost north of 30 percent on that balance, which dwarfs everything else if it happens regularly.
The full method, including where the published benchmarks come from and why they disagree with each other, is in what it actually costs to process an invoice.
Cost per invoice questions
See what the automated column looks like
The ROI calculator takes this number and compares it against an automated process, subscription included.
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