Cost-benefit calculations

Your return on investment (ROI) in Peppol is partly determined by how many of your trading partners come onboard. This assessment assumes an adoption percentage equal to the proportion of invoices sent from or received by your top 5 trading partners. The combined ROI for both accounts payable and receivable will also be governed by whether you become enabled for sending and receiving at the same time or whether you choose sequence this over time or prioritise one over another.

On the cost side, your investment may be much lower if you are using an eInvoicing-ready product. For more information, see How to get started.

Calculation basis

Invoice processing consists of typical steps when sending or receiving of invoices. Depending on the business process, eInvoicing can remove certain invoice processing steps or reduce the time spent on these steps. The calculations in this assessment are based on average time spent on each step and exception rates.

If you chose the average cost option instead of custom figures for the assessment, the outcome is based on the average values used below. If you chose to enter custom figures, your own data has replaced the average values.

Cost per invoice

The average cost in the Peppol eInvoicing value assessment is based on the Deloitte Access Economics (DAE) estimates. The average processing cost for a:

• PDF invoice is $27.67
• paper invoice is $30.87
• eInvoice is $9.18.

This is a shared cost estimate between the invoice sender and receiver. How this cost is split between accounts payable and receivable can vary substantially, but for the purposes of this assessment 40% of this cost is attributed to the accounts receivable process and 60% to accounts payable.

Most of the cost for PDF and paper invoices is attributable to the manual work required to enter the invoice data into your systems and process it for approval and payment, including dealing with exceptions and fixing errors.

Sales invoice cost

Cost per sales invoice has been calculated based on the typical time spent on the end-to-end process of generating an invoice through to the payment appearing in the bank account.

Sales invoice process

Creation ⟹	Sending ⟹	Reconciliation
6 minutes	3 minutes	1 minute
Time spent on collecting or triggering the billing information from various systems. The average time spent on billing is dependent on whether there is a sales order in place and whether the billing is based on products, services or recurring contract billing.	Time required to produce the invoice from the system, validate it, check customer details, etc., and then send it to the customer either on paper or in other forms.	Time spent on payment reconciliation, an accounting process that ensures a company's internal records of payments owed and due match the transactions that appear on the bank statements.

Sales invoice exceptions

In manual invoice processing, the percentage of exceptions increases and, in turn, increases the cost of a sales invoice. The calculations in this assessment that are based on the average costs use an average processing cost per minute that is applied to the average time required to fix this type of exception and the proportion of invoices that may contain this exception (average exception rate).

The individual cost components, exception rates, and time attributed to each step in the calculation are described below.

Exception type	Average exception rate	Average time to correct
Reconciliation Some bank transactions may not perfectly match accounting records due to various reasons. In these cases, failed transactions need to be analysed and corrected.	10%	4 min
Collect payment Following up late payments from customers, including reminders, contacting customers, and further actions.	48%	5 min
Delivery issues The invoice has not reached the customer for various reasons. Typical examples are incorrect information on the invoice, or the invoice was lost during postal delivery.	21%	16 min

Purchase invoice cost

The cost per purchase invoice has been calculated based on the typical time spent on the end-to-end process of receiving an invoice to paying the invoice.

Purchase invoice process

Receipt ⟹	Validation ⟹	Review ⟹	Approval
7 minutes	2 minutes	7 minutes	5 minutes
Receiving the invoice and entering it in your systems.	Time required to validate invoice data, check for supplier validity, and tax invoice validation, etc.	Time spent on business review of the invoice detail.	Time spent on approving the invoice for payment, including one or multiple approval steps based on your business process.

Purchase invoice exceptions

In manual invoice processing, the percentage of exceptions typically increases and, in turn, increases the cost of a purchase invoice. The individual cost components, exception rates, and time attributed to each step in the calculation are described below.

Exception type	Generic exception rate	Generic time to correct
Contested payment Invoices requiring clarification with the supplier prior to payment. eInvoicing can help reduce the frequency of these exceptions.	10%	20 min
Processing exception Exceptions in processing invoices requiring investigation by the finance department and/or reviewer, e.g. due to limited or incorrect data on the invoice.	24%	15 min
Late payment Time required to respond to enquiries about late supplier payments.	48%	5 min
Data accuracy Manual entry of invoice data resulting in errors on invoices that must be fixed.	3.6%	5 min