CFOs in 2025 are prioritizing accounts payable automation to cut costs, improve efficiency, and eliminate manual invoice processing errors. Businesses are turning to accounts payable process automation to scale operations, improve compliance, and ensure accurate payments.
In this blog, we’ll break down the true costs of manual processing vs automated invoice processing and explore how switching to automation can transform your accounts payable (AP) process.
Manual Invoice Processing: Does this process look familiar to you?
Hidden Costs of Manual Processes vs Automation:
Labor Costs vs. Automation Software
Labor Costs for Manual Processing: Manual processing demands significant employee time. According to a survey conducted by SAP Concur, most accounts payable teams spend over 13 hours per week manually doing this. Studies indicate that manual invoice processing can cost between $15 and $40 per invoice. For companies with larger volumes, these costs increase quickly.
How Automation addresses it: Invoice processing software typically involves an upfront or subscription fee. The cost per invoice processed ranges between $1 to $3, but this includes benefits like error reduction and speed enhancements. Over time, the savings in labor cost and improved operational inefficiencies offsets the initial investment, making it a better long-term solution.
Note: If you are a business processing 1,000+ invoices per month, you could save approximately $120,000 annually by switching from manual labor to automation, according to Ardent Partners.
Error Rate: Manual vs Automated Invoice Processing
Rate of Error in Manual Processing: A study by Sterling Commerce found that manual data entry process is error-prone, with an error rate of 1.6% per invoice. These errors result in duplicate payments, incorrect amounts, or delayed approvals, all of which disrupt workflows and damage supplier relationships. The Institute of Finance & Management (IOFM) reports that resolving these mistakes costs an average of $53 per error.
How Automation Fixes This: Automation leverages AI/ML technology and pre-set rules to minimize errors. Software detects discrepancies (e.g., mismatched PO numbers, duplicate invoices, incorrect amounts etc.) before approval, drastically reducing the error rate. With automation, businesses can achieve invoicing with greater accuracy.
Operational Costs: Manual vs Automated Invoice Processing
Costs of Manual Processing: Scanning, printing, and physical document storage are significant overheads in manual invoicing. Gartner estimates these operational costs at $12 to $30 per invoice.
How Automation Reduces Costs: With automation, paper-based processes can be reduced. Invoices are digitized and stored securely in the cloud, removing the need for physical storage. Additionally, automated workflows reduce the reliance on manual approvals, further cutting operational expenses.
Real-Life Wins:
Manufacturing company’s Seamless Transition with Symtrax’s Compleo Invoice Platform helped them achieve the following results:
- 94% Reduction in Invoice Processing Time: Invoice reconciliation time dropped from days to less than a minute per invoice.
- 100% Duplicate and Overcharged Invoices Identified: Automation flagged discrepancies, preventing overpayments.
- 45% Direct Cost Savings: Cost savings realized through early identification and correction of overcharges.
- Enhanced Visibility: Streamlined auditing and improved financial oversight across regions.
With everything being said about manual processing, it is also important to understand that invoice processing software is a sizable investment. How to decide which out of manual vs automated invoice processing is the right path for your business? Let’s find out:
How to Evaluate Your Current Process:
- How many invoices does your business process monthly?
- How do you receive invoices from your vendors (handwritten hard copies, digitally etc.)
- How long does it take to process each invoice?
- What is your current error rate for manual invoices?
- How many employees or hours are dedicated to managing invoices?
When to Switch to Automation:
If your business is:
- Scaling Rapidly: As invoice volumes grow, manual processes struggle to keep up, leading to inefficiencies and delays. Automation scales seamlessly with your business needs.
- Struggling with Errors: Invoice processing errors frustrate the accounts team, increase costs, and strain vendor-customer relationships. Automation eliminates these errors, ensuring smooth operations.
- Draining your Resources: The costs of paper, postage, and storage add up quickly. Automation removes these operational expenses, saving money and reducing your environmental impact.
Ending Note
If your business is spending more on manual invoicing than the cost of automating it, the switch is not just worthwhile, it’s essential for staying competitive in today’s landscape.
Manual invoicing might seem manageable at first, but the hidden costs quickly add up as businesses grow. Automation not only saves time and reduces errors but also delivers long-term cost savings and improved efficiency. There is a clear and discernable difference between manual vs automated invoice processing costs.
