What Is the True Cost of a Paper Invoice to Small Business Owners?


Have you ever thought about how much it really costs your company to process paper invoices? It’s important to take into consideration the time and potential errors involved with processing invoices manually versus electronically.

Studies have shown that companies spend an average of $12 to $30 to process an individual invoice. What you want to think about is that this price involves the complexity of your accounts payable function and its efficiency. Another thing this price range depends on is whether you’re using an automated invoice system or doing things manually.

It’s important for your small business to research electronic, cloud-based options that will ultimately save your company money and stress. There are great benefits involved with electronic invoicing. Maybe you’re not ready to make the switch until you see what it really costs your small business. Let’s take a look at the expenses involved with paper invoicing.

Direct Expenses

Direct expenses are those expenses related to paper, ink and postage costs involved with paper invoicing. While these expenses vary from business to business, the postage costs of mailing a first-class letter will put you back. It might not seem like a lot of money but keep in mind how many invoices you send out per week — you can see how this could add up for a small business.

Indirect Expenses

An indirect expense involves what it takes to complete a specific task related to invoicing. For example, what are you paying your employee to put paper invoices into envelopes? Think about how much time it takes for your employee to enter all of the relevant data needed to put together an invoice. These are the costs that matter when you take into account how much you’re actually paying for paper invoices.

Hidden Costs

There might be several hidden costs that you’re not thinking about when it comes to invoicing. You want to remember the time involved with sending invoices and then the time waiting to receiving a payment — don't forget to take into consideration if a check (or invoice for that matter) gets lost in the mail. This could cause your small business to slip into a negative cash flow situation, incurring some unwanted and unnecessary fees. If this happens frequently enough, it might hurt you to the point that you’re not able to pay your other bills.

Be sure you think of how much it costs to store invoices, the investments of storage and scanners, all while you pay someone to organize these documents — all of this adds up, whether you’re aware of it or not.

Calculating Your Costs

To get a more accurate calculation of your own invoicing expenses, consider examining the following:

  • How much time is spent on invoice processing (including time in the post office)
  • Total time spent assessing invoices
  • Time spent identifying and correcting data entry errors
  • Storing and shipping costs for physical invoices
  • The number of hours of productivity lost
  • Discounts lost and penalties incurred due to late payments, errors, etc.
  • Time spent by staff performing invoicing tasks


Saving time and money is important for your small business and switching to electronic invoicing will definitely aid in those efforts. You’re starting off great by minimizing the costs with paper, ink and postage. What’s even better is that you’ll be saving on time spent for a staff member to create, process, manage and organize these documents. Not only is electronic invoicing beneficial for saving time and money, but it accelerates the cash flow and can be safely backed-up on the cloud for easy access. After all, who doesn’t love helping the environment while also helping themselves? Just another added perk to electronic invoicing.

Simplify your invoicing with TransNational Payments today. With our Pi Integrated Payments solution, e-invoicing allows merchants to invoice via email and SMS while allowing customers to make payments via an embedded link. Widely used for B2B and direct customer billing, invoices are generated with line by line detailed information and the ability to customize/brand the email sent to the customer. Learn more today!