What is cost per invoice?
Cost per invoice is the total cost of processing one supplier invoice, from receipt through approval to payment. It is calculated by dividing accounts payable's costs for a period, mainly staff time but also software, outsourcing, postage and bank fees, by the number of invoices processed in the same period. It is a standard accounts payable benchmark.
Also calledAP cost per invoicecost to process an invoice
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- Formula
- AP costs ÷ invoices processed
- Main cost
- AP staff time
- Category
- AP, AR and payments
How cost per invoice is calculated
Benchmarks use a fully loaded figure: the pay and benefits of the AP team and the share of other staff time spent on invoices, plus software and outsourcing fees, printing, postage, cheque and bank charges and an allocation of overheads. Invoices processed covers every supplier invoice and credit note in the period. Because companies include different costs, the figure is most useful tracked over time within one company, or compared with a benchmark built on the same definition, such as those published by APQC. It falls as more invoices pass without manual handling, which is why it is reported alongside the touchless rate and invoices processed per AP employee. AP automation projects with BILL, Tipalti or Coupa are usually measured against it.
Common questions
What costs go into cost per invoice?+
AP staff pay and benefits, time spent by approvers and others, software and outsourcing fees, printing, postage, payment and bank charges, and a share of overheads. Some benchmarks leave out approvers' time, which lowers the figure.
How do companies reduce cost per invoice?+
By cutting manual steps: e-invoices or automated capture instead of keying, purchase orders on recurring spend so invoices match automatically, fewer approval steps, and electronic payment instead of cheques.
Which accounts payable metrics go with cost per invoice?+
Invoices processed per AP employee, cycle time from receipt to approval, the touchless rate, the exception rate and days payable outstanding.
Software used to reduce cost per invoice
Part of Accountio’s accounting technology coverage · Glossary
