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How to Reduce Invoice Processing Costs

Written by Ana Canteli on 4 July 2025

Reducing invoice processing costs is a key priority for modern accounts payable departments aiming to cut labor expenses, minimize duplicate payments, and improve operational efficiency. Paper-based processes remain expensive: each invoice can take up to two weeks to process and cost between $12 and $30 per invoice.

Diagnosing Invoice Processing Costs

Invoice processing costs include several factors:

  • Manual data entry and handling

  • Material costs such as printing and storage

  • Loss of early payment discounts and late payment penalties

  • Errors leading to duplicate payments

According to industry standards, automated systems can reduce processing costs from $12–30 down to just $3–5 per invoice, resulting in significant cost savings and better expense management.

2. Process Automation and Optimization

a) Data Capture and OCR
Modern automation solutions use OCR and artificial intelligence to automatically extract data from invoices, eliminating repetitive tasks and reducing errors.

b) Invoice Matching
Comparing invoices with purchase orders and delivery notes improves accuracy and prevents duplicate payments.

c) Automated Workflows
Eliminating manual data entry shortens processing times, streamlines accounts payable workflows, and ensures policy compliance.

d) Electronic Invoicing
Using digital formats like XML enables faster, more reliable, and controlled document exchange.

3. Introducing OpenKM as the Ideal Solution

OpenKM is a powerful document management platform that optimizes invoice processing and generates tangible cost savings through:

  1. Automated Invoice Management – Automatic recognition, indexing, and routing of invoices to reduce processing time and labor costs.

  2. Advanced OCR and AI – Accurate data capture, batch classification, and efficient invoice processing workflows.

  3. Electronic Invoicing – Native support for XML, digital signature, traceability, and regulatory compliance to avoid late payment penalties and missed early payment discounts.

  4. Custom Workflows – Configurable approval chains, automated rules, and alerts to support executive oversight using OKMFlow, OpenKM’s native workflow engine.

  5. ERP and Global Office Integration – Compatible with CMIS, REST API, and Microsoft extensions for unified invoice processing across the organization.

Key Benefits of OpenKM:

  • Transforming paper-based processes into digital workflows

  • Lowering invoice costs and improving processing times

  • Full visibility and traceability of invoice processing costs

  • Compliance with industry standards

  • Improved operational efficiency and freeing staff for higher-value tasks

4. Best Practices with OpenKM

To maximize the benefits of OpenKM:

  • Develop an automation roadmap to map and optimize workflows

  • Train finance and accounting teams

  • Monitor key metrics such as processing cost, time spent, and late payment penalties

  • Involve the travel manager or other expense-related departments to consolidate all invoices

  • Continuously audit and improve accounts payable processes

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