A/P Automation is one of the few software categories where you can quickly calculate…
- How much does A/P Automation software cost?
- How much you’ll save
- How quickly you’ll see a return on your investment & breakeven point
How Much Does A/P Automation Software Cost?
We just published a full A/P Automation software directory for how much the software will cost, many with direct links to their pricing pages. For general guidance, expect the software to cost somewhere between $1 – $2 per invoice processed. We generally use $1.50 as a good litmus, but certain solutions run higher & solutions that also come in lower (<$1 per invoice on some!).
The most common pricing model is a price per invoice, but you’ll occasionally find all-in pricing packages as well (ex.) Spend $50,000 / year & receive unlimited invoice processing).
How Much Will You Save With A/P Automation Software?
To know how much you’ll save, you must know how much you’ll spend ($1.50 average mentioned above) & then understand how much you’re currently spending. There have been recent publications on invoice processing costs for organizations (see CFOcom – The Real Cost of Invoice Processing). However, it’s really not that difficult to calculate.
Factor in your fixed costs (storage, software licenses, late fees, etc.) as well as your variables costs (accounts payable clerk rates) to get your current total costs.
Do NOT factor in overly arbitrary costs like managers’ salaries (you won’t be cutting these costs with any reduction in A/P work), postage/supplies fees (you’re going to be paying to send payments one way or the other).
Our simple calculation for your current invoice processing cost is…
How Quickly You’ll See a Return on Your Investment & Break-Even Point
Simple math from the example above tells you that if an invoice with Accounts Payable Automation software costs you $1.50 per invoice & your current costs are $3.60 per invoice, you’ll be saving over $2.10 with each document processed.
But not so fast…
Regardless of what the salesperson tells you, your A/P Automation solution will not fully automate your accounts payable process from beginning to end. Therefore, with a liberal estimate, we say that 50% of the clerk processing time might be saved (with a fantastic, top-notch implementation). You must also factor in implementation costs, which with certain solutions, can be sky-high.
Does A/P Automation Software Make Sense for Your Organization?
We haven’t discovered too many scenarios where organizations didn’t find real cost savings after implementing a solution. If your current costs are high, you’re able to find a solution that’s in the ~$1/invoice range & you can keep your implementation costs low. It’s almost a no-brainer.
We published a 40-minute webinar with the team @ MSDynamicsWorld.com going into every aspect of determining if an implementation makes sense & how to get it done as quickly as possible. It’s from an absolute non-sales perspective, so certainly check it out.
Considering A/P Automation Software?
Use our wizard to instantly match-up what you need with the solutions in the marketplace & see recommendations on which Accounts Payable Automation software fits you best. Simple, personalized & free.