The ROI of Switching From Manual to Autonomous Invoice Processing

As organizations build more digital literacy and skills, automation technology has become a must-have, regardless of industry. Autonomous invoice processing is powered by AI and is a game-changing solution for CFOs looking to reduce costs in their AP departments. With advanced automation in place, businesses can allocate resources toward areas of greater value, such as providing better-informed, data-driven strategic input or innovative ideas. This article explores the compelling ROI of transitioning from manual to autonomous invoice processing.

According to Gartner research, 50% of B2B invoices will be processed and paid without manual intervention by 2025. Quickly ingesting, processing, and routing the correct invoice to the right person for approval is essential to keep processing cycle times as low as possible. This leads to fewer errors and a reduction in late payment fees. Hyper-automation is becoming the standard, with AI-powered platforms offering end-to-end invoice processing and bill pay without the need for human intervention.

Common invoice mismatches alleviated by autonomous invoicing

Not all invoices are created equal, which is why invoice processing can be so tedious. These are some of the most common reasons for a mismatch between the invoice and the purchase order (PO), which is extremely time-consuming and ideal for an autonomous approach:

• Pricing discrepancies at the line level or for the total invoice
• The supplier’s name is unknown or not identifiable
• Invoice quantities do not match the PO
• Tax or other surcharges added to the invoice but are not on the PO
• Missing or differing part numbers
• Incorrect PO reference information on the invoice
• A nonexistent PO for an invoice
• Invoices that cover multiple POs

AP automation solutions with built-in AI are driving higher PO match rates, as they are using proprietary algorithms and machine learning to train the AI to perform better out of the box than a simple rule- or template-based solution. Intelligently dealing with these mismatches through automation leads to shorter approval times and correct financial coding, among other benefits.

Key savings of autonomous invoice processing

1. Reduced processing time and costs

Autonomous invoice processing dramatically decreases the average time spent on each invoice. Traditional manual methods often require about 10 minutes per invoice, costing around $12 each. With AI-powered automation, this time can be reduced to just one minute, bringing the cost down to less than $2 per invoice. This significant reduction in processing time and cost can lead to substantial savings, especially for organizations handling large volumes of invoices.

2. Improved accuracy and control

AI technology excels at handling repetitive tasks with precision. By implementing autonomous invoice processing, companies can minimize errors associated with manual data entry and classification. This increased accuracy not only saves time but also enhances financial control by providing:

- A complete audit trail

- An electronic approval process

- Quicker and more efficient audits

- Improved visibility into unpaid invoices

- Reduced invoice and payment fraud

3. Enhanced employee productivity

A Stanford University study revealed that productivity declines sharply when employees work more than 50 hours per week. With 46 percent of AP teams reporting longer hours to process higher invoice volumes, the risk of burnout and errors increases. Autonomous invoice processing alleviates this burden, allowing finance professionals to focus on more strategic, value-added activities.

4. Cost savings beyond processing

The financial benefits of autonomous invoice processing extend beyond just reducing the cost per invoice. Additional areas of savings include:

- Prevention of late payment fees

- Increased capture of early payment discounts

- Reduced costs related to paper invoice handling

- Fewer full-time employees required for invoice processing

Here is a visual comparison of productivity and costs with no automation vs. and end-to-end automation:

‍Real-world ROI: HSB Real Estate

To illustrate the tangible benefits of autonomous invoice processing, consider the example of HSB Real Estate. By implementing the Vic.ai autonomous finance platform, HSB Real Estate reported saving 60,000 man-hours annually. This is equivalent to 16 employees taking a full work week off without any change in processes or the need for additional hiring.

Evaluating ROI: Key considerations for CFOs

When assessing the potential return on investment for autonomous invoice processing, CFOs should consider several factors:

1. Current invoice volume and processing costs: Analyze your organization's current invoice processing metrics, including the number of invoices handled monthly, the average time spent per invoice, and the total cost of your AP department.

2. Potential for scalability: Consider how autonomous invoice processing can support your company's growth without the need for proportional increases in AP staff.

3. Error reduction and its financial impact: Quantify the current costs associated with invoice errors, including time spent on corrections, potential late fees, and missed discount opportunities.

4. Vendor relationships and payment terms: Evaluate how improved processing speed and accuracy could lead to better vendor relationships and potentially more favorable payment terms.

5. Compliance and audit readiness: Factor in the value of enhanced financial control and easier audit processes that come with a fully digital, AI-driven system.

6. Employee satisfaction and retention: Consider the non-monetary benefits of reducing tedious manual tasks, potentially leading to higher job satisfaction and lower turnover in your finance team.

Staying lean and scalable: A critical cost-saving benefit

One of the most significant advantages of switching to autonomous invoice processing is the ability to maintain a lean AP team even as the business grows. This approach allows companies to:

- Avoid the costs associated with hiring and training new AP staff

- Reallocate existing team members to more strategic roles

- Increase overall departmental efficiency without expanding headcount

By leveraging AI to handle the bulk of invoice processing tasks, finance departments can scale their operations without a corresponding increase in personnel costs. This lean approach not only contributes to immediate cost savings but also positions the organization for more agile and cost-effective growth in the long term.

‍The financial imperative of autonomous invoice processing

As the business world continues to digitize, staying competitive means embracing technologies that can demonstrably improve financial operations. Finance is already autonomous — and how quickly leaders implement AI-first technology for organizational growth is still within their control.

For CFOs, the decision to implement autonomous invoice processing is not just about adopting new technology — it's about making a strategic investment in financial optimization. And the ROI potential is clear: reduced costs, increased efficiency, enhanced accuracy, and improved financial control.

This article originally published September 2022, and was updated October 2024.