Figures from the Institute of Management and Administration (IOMA), suggest that it costs companies who don't use invoice automation £7 to process each vendor invoice. On the other hand, firms who do use automation have been found to reduce this to £4.20 - a 60% saving.

Greater control over when invoices are paid

Being able to control when your invoices are paid through invoice automation means you will waste less company money on fines for late payments. It also means you'll be able to take advantage of late payment incentives.

Usually an early payment incentive will be a discount of 2% for 10% of the invoice amount. As an example, a 2% discount on a £2,500 invoice will result in a saving of £50.

Don't forget that legally if you pay your invoices late, clients can charge you. The law says you can be charged a late fee of up to £100 invoice automation software on the amount of the invoice, as well as interest calculated at the Bank of England base rate plus 8%.

For a £5,000 debt which is late, you could actually end up paying at least an extra £400 unnecessarily.

Fewer errors

Invoice automation will reduce the number of errors made on invoice payments. IOMA figures suggest that the average invoice error rate for businesses is 1.4%. Errors include over-payments, under-payments, inability to match invoices and PO numbers, and lost invoices.

According to IOMA, 17% of businesses say that their duplicate invoice payment rate is between 0.1 and 0.5%. If your company had a duplicate payment rate of 0.3% on £150 million worth of invoices, this would represent an overpayment of £450,000 per year. You could recover these costs but this might mean paying a third party. It would almost certainly mean wasted time and hassle.

Storage

Research has revealed that it costs around £11 to file each paper document. On- and off-site storage costs add up. Automated invoice processing drastically reduces the number of paper documents you need to store. Therefore, your storage costs will go down and you won't need to spend money on equipment such as filing cabinets.

Say your company spent £300 per month before invoice automation on storage costs, you could realistically save £3,600 every year.

Printing, faxing, copying and posting

The costs associated with processing invoices, such as printing, faxing, photocopying and posting all add up. Invoice automation makes these processes largely redundant and therefore reduces costs.