Saving Money With Accounts Payable Outsourcing: How Much Should Paying Your Bills Really Cost Your Business?
Processing accounts payable invoices can be expensive for your business. business But can you save money with an accounts payable p y outsourcing gp partner? A survey conducted by the International Accounts Payable y Professionals (IAPP) ( ) found that it costs – on average - $8 to process an invoice manually; other firms reportt processing i costs t are as high hi h as $10-$20 for a single paper, fax or email invoice!
Do You Know How Much it Costs to Process Your Invoices? Many organizations often don’t know how much it costs them to p process each individual invoice, but ‘cost per invoice’ is an important metric to understand – and it isn’t difficult ff to calculate
If you have a dedicated Accounts Payable department simply divide the cost of department, running the department by the number of invoices p processed. For example, p , if it costs $10,000 to run your AP department each week and they process 1,000 invoices - each invoice costs your organization $10. (Th (There are many ways to t calculate l l t your company’s cost per invoice. This survey does a great job of covering some of the most popular.)
ď śWhat is the Accounts Payable Outsourcing Savings? The hunt for lower AP costs has led many y businesses to Accounts Payable y outsourcing. It's a great way to improve performance, streamline operations and reduce costs. ď śHow much cost savings can companies realize? li ? S Switching it hi tto an automated, t t d electronic invoice outsourced provider can generally reduce the cost per invoice to well under $3.
ď śWhat Does it Take to Outsource AP? To achieve the greatest value from outsourcing AP, the entire process should be fast and require q minimal implementation to keep internal costs, set-up and training at a minimum.
Even with outsourcing, it’s important that the organization keep an accounting team for invoice decisions that can require q an accountant's review. The vast majority of invoices, however, can be easily automated – meaning your staff won’t need to review items that don't need human expertise.
ď śAccounts payable outsourcing offers many benefits to businesses including: Reduction in labor costs - companies p report up to an 80% reduction in labor and its associated costs
Lower per invoice costs - well under $3 per invoice Fast, seamless implementation into your existing enterprise systems Custom configuration for your business - systems can be cloudbased, installed locally at your location, or a combination of the two
ď śImproved accuracy - businesses have reported paying up to $50-55 to handle each invoice error. ď śA strong outsourcing partner uses sophisticated error identification and correction systems to reduce errors and costs.
ď śComplete audit trails and instant record and reporting systems
ď śRouting of invoice deviations via smartphones or web browsers
An automated, accounts payable outsourced solution can be a tremendous boost to productivity, accuracy y and your y company’s p y bottom line. partner with It’s critical to choose a p the expertise to craft the solution that works best for your business. A d understanding And d t di your ttrue costt per invoice is an important step towards improving your company company’s s efficiency.
Do you know how much AP processing costs your business each month? Read more about Outsource Accounts Payable y here: www.berkone.com
Published on Nov 19, 2012
Processing accounts payable invoices can be expensive for your business. But can you save money with an accounts payable outsourcing partner...