An AP cost savings calculator is a tool that will help you determine how much your company or organization can save by implementing procure to pay (P2P) automation.
But more importantly than that, it will help you calculate the ROI of investing in AP automation.
Table of contents
- What is AP Automation?
- How Does AP Automation Save Time and Money?
- How Do I Calculate How Much AP Automation Could Save my Organization or Company?
- AP Automation Savings Using Verified Data Capture Service
- Saving Money with AP Workflow Automation
- Invoice Payment Automation Not Only Reduces Costs – But Creates a Revenue Stream
- Use our AP Automation Cost Savings Calculator to See How Much Your Organization Could Save
- Bottom Line – AP Automation Cost Savings Calculator
What is AP Automation?
AP Automation (Accounts Payable Automation) is a solution used by accounting teams to digitize and streamline the processing of purchase orders, invoices, and payments. It is also know as procure to pay automation.
AP Automation software uses advanced optical character recognition (OCR) technologies integrated with robotic process automation (RPA) software to automate accounts payable PO, invoice, and payment processes.
Top of the line AP automation solutions also use Verified Data Capture Services to achieve near-100% accuracy of AP data automation.
For more details about what AP automation is, read our article: What is Accounts Payable Automation (AP Automation).
How Does AP Automation Save Time and Money?
Implementing an AP automation solution like A/P One can reduce the hard labor cost of invoice processing by 78% – resulting in immediate cost savings and ROI for your company.
It’s a simple AP calculation. The industry average AP clerk can process 5 manual invoices per hour (12 minutes per invoice). This includes data entry, proofing the manual entry, correcting ‘fat-finger’ mistakes, GL coding, and processing the invoice.
But A/P One automation creates efficiency that allows your AP clerk to process 30 invoices per hour (2 minutes per invoice)!
And AP automation save money because time is money!
How Do I Calculate How Much AP Automation Could Save my Organization or Company?
To make an AP automation cost savings calculation you need to consider:
- The hard and soft costs of invoice data capture.
- The time spent processing and coding invoices, chasing after lost invoices and mis-payments, and late payment penalties.
- The time managers and executives have to spend looking at and approving invoices.
AP Automation Savings Using Verified Data Capture Service
Adding Data Capture Service technology to your AP automation solution multiplies your savings. This service saves data entry time by using technology and human verification to capture key information from each invoice and entering the data for you, providing nearly 100% accuracy.
How much can Verified Data Capture saver your organization? Industry averages are that data capture technology can save from $2 to $5 per invoice.
For the purposes of an AP automation cost savings calculator, we use a conservative estimate of $2.75 in hard labor cost savings per invoice when using our Verified Data Capture Service, OCR, or a combination of both.
Saving Money with AP Workflow Automation
AP automation also saves time and money by automating the processing of invoices through your invoice workflow. Your company or organization will achieve considerable savings by automating your AP processing and approval tasks.
Whether you choose our fully customizable Enterprise solution or our cloud based SaaS solution A/P One, you will save time, resources and money with electronic invoice processing, automated GL coding, and electronic invoice filing and retrieval. Automating and digitizing invoice approvals means no more chasing managers around for approval. And approvers love the ability to see and approve invoices with a single click. On any device. From anywhere in the world!
For the purpose of our AP automation cost savings calculator, we are using a conservative estimate of $4 in savings per invoice when using an AP workflow automation solution.
Invoice Payment Automation Not Only Reduces Costs – But Creates a Revenue Stream
With the addition of AP payment automation, CoreIntegrator is able to deliver an end-to-end AP automation experience. Invoice receipt, data extraction, workflow, and then issuance of payments via check, ACH, wire transfer and virtual credit cards are all automated.
And then virtual cards provide a rebate for every dollar spent on AP invoice payment. Suddenly you earn money by paying bills. It’s not often that the AP department gets to be a profit center!
For the purposes of our AP automation cost savings calculator, we are using the standard rebate rate of 1% for every dollar spent using the virtual credit card.
Use our AP Automation Cost Savings Calculator to See How Much Your Organization Could Save
Don’t worry about doing all this math on your own.
We built an AP Automation Cost Savings Calculator. It lets you enter the number of invoices you pay per year, the amount you pay in AP invoices, and the percentage of payments you could convert to vCard payments for a rebate.
This powerful tool also lets you toggle data capture, invoice automation, and vCard payments on and off. So you can see what your savings are for each feature and/or cumulatively.
Bottom Line – AP Automation Cost Savings Calculator
AP automation not only saves your company or organization money. It can also turn your AP department into a revenue stream.
So check out our AP Cost Savings Calculator. And then schedule a free, no pressure, and no obligation demo today to see how much you could save!