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AP automation—solve payment challenges with an invoice-to-pay solution
And at this time, I'd like to formally welcome everyone to our September webinar focusing on the topic of AP Automation, Solve Payment Challenges with an Invoice-to-Pay Solution, hosted by our U.S. Bank Global Treasury Management partners. My name is Brianna Dunn, and I'm from the U.S. Bank Global Treasury Management Learning and Development team, and I'll be moderating today's webinar.
Now, before we start today's discussion, I'd like to welcome as well as introduce our speakers, starting with senior product manager of AP Automation Services, Robert Laughlin, senior product manager of Emerging Markets and Strategy, Dan Rosenfeld, and working capital consultant joining us again this month, Bryan Schneider. So at this time, I'll hand it over to you, Robert.
Great, thanks, Brianna. So folks, before we get started, we're just going to level-set on what the agenda is going to be. So the first part of today's presentation is really going to focus on what challenges do businesses face with the invoice to pay process. Second part of it will be best practices and things to consider when you are seeking an AP automation solution. And then finally, how to create a business case for an invoice to pay solution.
So let's jump to the next slide, Brianna. And folks, we're going to start off here with the current challenges that businesses face with their AP automation solution in today's environment. So we're going to start off talking about fraud. So the first circle that you see on the slide here, 81% of businesses report being the target of a payments fraud attack. What we're hearing anecdotally from our clients is that since the pandemic started, fraud is really on the rise.
For example, with payroll and benefits providers, they're stating that ACH direct deposits are being routed to fraudulent accounts. There's more instances of business email compromise, which is when somebody internal in your organization gets an email stating it's from the CFO, but it's really from a fraudster requesting a wire being sent to a fraudulent account. So what our clients are saying is that it's hard to validate that these requests for changes to payments or outgoing payments in general are coming from legitimate requesters.
So we'll talk a little bit later on as to some of the things that you should look for in order to help prevent that. Secondly is that 52% of fraud is committed by internal actors. And this statistic frequently surprises our clients. Nobody likes to think that they've got a bad actor in house. But it does happen. And one of the examples that we use is that we've had a client who had a bad actor in house. She learned the holes in their process.
And specifically what was happening is that his client was taking requests over the phone to change supplier or account information for electronic payments. Well, the fraudster figured that out, set up a fraudulent supplier, and had fraudulent payments diverted to that account. Fortunately, the client recovered most of the funds. But, and moving on to the third circle, 53% of victims recover nothing, at 32% only recover partial.
So regardless of the payment type, whether it's check, ACH, wire, if a bank's client experiences fraud, banks will do everything in their power to try to reclaim those funds. But ultimately, their powers are limited. Once the funds are in the receiver's account and if those funds are withdrawn, who's really left holding the bag?
So really what can you do to help protect yourself against payment fraud and an AP automation process? Obviously Positive Pay with [INAUDIBLE] verification for check payments. Banks are starting to offer account validation services for things like ACH and wires, which is where the recipient's account will be validated against the name that's on the account in order to protect you when you're enrolling those folks for electronic payments. Possibly doing callbacks for wires. And that's just to name a few things you can try to protect yourself.
So now I'm going to hand it over to my colleague, Bryan Schneider, who's going to talk more to us on the current challenges facing the automation piece.
Great. Thank you, Robert. So on the automation side, a couple of buckets here. So the first one related to paper checks. So one of the recent analyst reports has noted that 49% of companies say payments by paper check are still their most common method. So this is very common from what we're seeing in our client conversations. We continue to see a lot of in-house checks. And certainly given the pandemic and the current environment, it continues to pose quite a challenge as organizations are looking to shift and move away from the in-house check print for a number of reasons.
The next category here is related more to visibility. So 69% of controllers cite improved financial visibility as their top AP priority. So again, based on the data here, we see that organizations are continuing to have some challenges related to visibility across the organization, certainly in decentralized companies where, let's say, you've got operating plants throughout the country, where you're receiving invoices and receiving actual goods and services.
And then trying to have visibility into how many invoices, let's say, are in the queue. Are you able to take advantage of what the early payment discounting and some of the other important items? And just giving that overall view of cash forecasting purposes, so cash in, cash out. So one of the large components we're seeing across the board again is on the visibility side.
The last statistic here, again, just framing up some of the challenges related to invoice to pay is related to the automation side. So 25% of AP departments describe their invoice processes as being highly automated. So clearly organizations as a whole are acknowledging that there's still a tremendous opportunity to drive automation within their organization.
And based on the conversations that we've certainly been having and especially given the pandemic, given the number of restrictions and the need to work remotely, I think we're going to see this one start to shift over time as we're seeing more and more corporations begin to actually take action on the automation side.
So with that being said, we'd love for our attendees here to share with us and participate in a poll question. So has your organization experienced fraud or attempted fraud in the past 12 months? So this is an anonymous question. It's more for us to look at in aggregate and for us all to look at together just to get a sense for how prevalent is fraud, then, in your world, so to speak.
So we should be pushing a poll here. Dan and Robert, I'm curious. I know certainly in working with our treasury management consultants, we're seeing a lot of clients acknowledging fraud. It seems like every week we're seeing it, potentially in the hundreds of thousands of dollars. And this has become more and more of a decision maker as it relates to invoice to pay. Are you all seeing something similar on the product side?
Yeah, for ACH and wires, we're definitely seeing an increase in fraud and fraud attempts. Particularly ACH is a big one right now. Wires has been, I think, pretty much consistent with what it has been. But ACH has been particular.
OK, great. So it looks like the poll has come back. Out of 114, we've got about 37 showing that, yes, they've experienced some sort of fraud. So getting close to 30%, a little less than 17% acknowledging that, no, and thankfully that's some of the audience that hasn't thankfully had to deal with that type of situation.
So really appreciate your participation in the poll. It helps us all learn here on the call together. So with that being said, I'm actually going to turn you over to Dan Rosenfeld. And Dan, could you share a little bit more with us in terms of other challenges that we're seeing in the marketplace beyond some of the ones we've touched on here with fraud and automation challenges?
Absolutely. Thank you, Bryan. So there's three more challenges that are impacting AP that we want to discuss before we move forward into some best practices. And those three challenges are ERP and accounting system integration. So everyone's ERP is really the system of record within the enterprise, and it's important to maintain it as such.
But connecting your AP payment systems into the ERP, it can be a real barrier for entry. 69% of organizations that were surveyed found to be a major barrier to electronic payments. Next is remote and reduced workforce. So this is a pretty timely topic right now, particularly over the last couple of quarters.
A recent study by Deloitte found that 99% of CFOs anticipated an increase in flexible working within their financial divisions due to COVID-19, so basically everyone. It's universal. So we've all experienced some benefits from working remotely. It lowers business expense. We have better access to new job applicants. But it does have its own unique challenges, in particular for AP departments.
And those roles have strictly heavily depended upon people physically being in the office, whether that's to open the physical mail, to have that invoice, or to file that invoice away in a filing cabinet, or to do the physical paper shuffle for workflow approval. Not being in the office has impacted AP departments' ability to work effectively. It's resulted in late payments, missed early payment discounts, and, to a degree, compliance issues, as they're no longer able to file invoices like they had been.
And the last challenge we want to hit upon is the supplier payments and onboarding. So capturing payment information and banking details for new vendors is time consuming. Onboarding can be very fragmented and difficult for vendors. It can be expensive. And as Robert was talking to earlier, it can be fraught with fraud risk, both internal and external. So all of these complications with supplier payment and onboarding further caused delays in our payment processing.
So with that, now that we've kind of understood some of the challenges that we're all facing, there is good news. There are best practices that can address all of these aforementioned challenges. But before we move into best practices, I want to take a quick second to just kind of level set on when we see AP automation, what are we talking about?
And really simply put, it's the end-to-end automation starting with invoice capture, going all the way through the workflow approval process, to payments to vendors, with reconciliation reporting on the back end. So we're moving all the manual or as much of the manual as possible through that process, making it faster, streamlining it, reducing the friction.
So with that, we're going to open up another poll. And the question we have for you right now is, how many of you are actively planning to implement automation in your invoice to pay process in the next six months?
Bryan, being the working capital consultant amongst us here, the one being out in the market the most and talking to customers and potential customers, what are you seeing? In particular over the last six months, have people-- are they more accelerated in their need? Has it grown static? Or are they just trying to triage existing issues? What are you seeing out there?
Hey, great question. I think it's not a matter of if. It's when now and how much is going to be done at one time. So some of our clients that we're speaking with will look to do a full replacement of the true invoice to pay solution, and others may be looking to really leverage more of the payment side, as they might be more comfortable with their existing invoice automation as it stands within the couple that with the power of what we're able to bring to the table on the payment side is another component. So we're seeing a little a little bit of a mix in terms of how clients are choosing to move forward.
It looks like we've got a little bit more time on the poll question here. We've got some great participation coming. All right.
All right, not bad, just over half. Excellent. Thank you very much, everyone, for your participation in that poll question. That's definitely helpful for us. We appreciate it. So with that, I want to hand it over to my colleague Robert, who's going to start walking us through the best practices in the conversation with Bryan.
Great. Thanks, Dan. So for the next part of this talk, we're going to do an interview, like a little talk show format. We thought it'd be fun to interview Bryan. Because, as Dan mentioned, Bryan, as our working capital consultant here at the bank, he really has a good overview of the end-to-end process for clients. He talks to clients on a very regular basis.
So, Bryan, we've compiled some questions that we typically get from our clients and we want to pose to you and get your input on it. So for the first one, for eliminating paper invoices the manual processes, what does a typical day in the life look like for an invoice, both before automation and post automation?
Sure. Great question, Robert. So we typically like to think of it as the paper shuffle when we think about, or at least a little bit more antiquated processes, manual processes with heavy paper involvement. So if you think about how an invoice is being received, traditionally that's been let's, say by mail. We're seeing certainly more and more of the percentage of that going towards electronic form through email with a PDF attached.
And in some cases, we're still seeing some faxes. And then in some cases, even an EDI transmission, they're a little bit less likely. The next piece is capturing. So in the old world, if you will, or some of the current environments, we continue to see challenges with capturing that information.
So basically manual keying has been a big way to take that information from the invoice and get it into the system. And then also from a routing and approval perspective, again, shuffling the paper around the organization has been very much the way that that invoice has gotten through the organization.
And then, of course, any sort of exceptions, again, it's difficult to have the visibility. And in an automated world, we see a lot of those paper manual steps truly become more automated. So the ability to receive that invoice electronically, pull the information from the invoice through some of the older technologies, either through OCR or data later extraction, and then also the routing and approvals, and then also having an audit trail for that process, as well as the matching process.
So a two- or three-way match absolutely makes it much easier to make that happen in an automated fashion. And then in the cases where you may have, let's say, a non-PO-driven invoice, a lot of the machine learning, AI, robotic process engineering can really step in and help corporations essentially build tolerances around what they're willing to accept in order to increase that straight through process.
And oftentimes, we can see anywhere from 80% to 90% straight through processing of these invoices as you move from that paper manual experience, or the classic paper shuffle, over to a more automated experience, again helping to eliminate those paper manual steps.
Great. That's very interesting because it always surprises me how many of our clients will get an invoice emailed to them, but they actually open up to PDF in the email and print it out and then process it as paper, which it's great because you eliminate the mail flow, but you're still processing an actual piece of paper, which takes a lot more time and effort.
So let's move on to the next one. So the next question here for accelerating, workflows. How do workflows help assist our clients, particularly in today's environment?
Sure, so workflows are very important. It helps organizations scale. So as s growing organically or through acquisitions, for example, they need to make sure that the business, especially with respect to invoice to payments, can scale and grow effectively. So, one, having those processes in place are critical.
The other nice aspect of having that workflow is that it gives an opportunity to understand where there are opportunities for driving efficiencies. And again, as we've talked about, with a lot of those paper manual steps, we're able to sit down and look at, how do we accelerate the movement of the invoice through the organization to be able to take advantage of things like early payment [INAUDIBLE]?
Provide the visibility, accelerating the visibility to the information. And then, of course, all the way through to the payment side of the equation as well.
That's great. So excellent. I appreciate that as well. We hear from our clients that workflows are super important, not just on the invoice side but on the payment side as well with getting approvals for funds leaving the house. So let's move on to the next one.
You touched a little bit in your first question about the OCR or the Optimal Character Recognition. How are invoices electronically read? Can you just going into a little bit more detail on that?
Sure. We'll do that fairly quickly here. So OCR, Optical Character Recognition, is really just pulling information from an image. Text or data layer capture is really looking at information that may be behind that PDF so that better straight-through processing can happen. So it's looking at, let's say, it's better differentiating between an O and a zero or an I and a one.
And so those are, when you think about best practices, you want to try to look for partners that are going beyond the old-school Optical Character Recognition or OCR and bringing some newer technologies to market.
That is great advice, is looking for partners that have the latest and greatest technology. So moving on to the next one, electronic invoicing and cost reduction. Our clients frequently get fears that they think that the only way they can reduce cost is to cut staff. And nobody wants to do that, ultimately. So how would you address that?
Yeah, so the great thing with invoice automation and also the equal side of the payment automation is that it truly does enable organizations to free up resources and their staff to, let's say, move the staff against other, let's say, more strategic initiatives within the organization, so taking them out of, let's say, the manual keying experience.
So overall, we've seen as much as an 85% reduction in invoice processing costs through actually moving forward with an automation solution. And again, it's really up to the organizations and what their particular needs are in terms of redeploying the talent within their organization, perhaps, to some other roles.
Good insights, Bryan. I appreciate that. So folks, now we're going to move on to talking a little bit about some of the best practices that you can look for when looking for an AP automation solution. So we're going to jump ahead to the next slide, and I'll hand it back over to Dan.
Thanks, Robert. Appreciate it. So that was a great discussion, Bryan. Thank you for participating in that. Now that we've kind of level set on best practices, we want to turn the table a little bit and talk a little bit about our own solution, AP Optimizer, as well things you should be looking for in market for those of you that are kicking the can or thinking about an AP automation solution.
So first and foremost, we think it's important to be looking at a solution that really is end to end. When we say that, that's starting with invoice management and goes all the way through to payments. You want to do this in a single platform if possible. The more vendors you bring in, the more integrations you have to deal with. The greater the friction. The harder the implementation becomes. So really, that full end-to-end solution we think is critical.
Second, connecting with your ERP system with minimal IT support is also, we think, table stakes. Doing so maintains the ERP as the system of record, which is important. Third, something we haven't really hit upon yet, but that's what kind of B2B vendor network will your vendor bring to the table, will your partner bring to the table?
Our solution comes with about 425,000 B2B suppliers ready and accepting an electronic payment already. So if you're in market and you're looking at options, make sure you dig into that one a little bit and you understand really what's inside of that network. What are the quality of those vendors? Are your vendors there, or is it really not a true B2B payments network?
Last, not least, we kind of hit upon it a little bit earlier, and that's vendor enrollment. Having a unified vendor enrollment process is very important. We believe it improves your relationships with your vendor. It accelerates the implementation of an AP automation solution. And it creates just a more efficient cost savings process that will generate greater rebates in the end.
So now that we've talked a little about some best practices and things to look for in an overall AP automation solution, we're going to dig into the two key components. I'm going to speak to the invoice automation first. And that by itself could be a 45-minute session, but clearly we're not going to do that. I just want to hit upon a couple of the key aspects of invoice automation with respect to our AP Optimizer solution.
First, from the time a vendor submits an invoice, whether it be manually, or via an API, or through the vendor portal, or through email, or even through paper mail and gets scanned in, the invoice gets captured and stored electronically using a lot of the best practices that Bryan was speaking to earlier. This then leads into the automating the workflow process and approval.
So there's PO invoices and non-PO invoices. On the PO side, you want to look for two- and three-way matching, posting to the ERP systems. And when exceptions are identified, clear resolution and approval tasks that can be solved within the system, further reducing touch and friction.
And on the non-PO invoice side, AP Optimizer has automated code entry and approval routing and rules-based approval and rejection of invoices. So I'm now going to hand it over to Robert, who's going to walk through some of the integrated payables topics.
Great. Thanks, Dan. So, folks, when you hear the term "integrated payables," it's pretty generic. Most banks offer an integrated payables or consolidated payables solution. And basically, typically, it just means that all payment types are consolidated into one file. Ours goes a little bit beyond that with AP Optimizer, and we're going to give you some best practices and things that you should look for when looking for a solution.
So first of all, look for a provider who can integrate into your ERP system. So, for example, with U.S. Bank and AP Optimizer, we connect and integrate into dozens of ERP systems. By finding a provider that can integrate into your-- who is already integrated into your ERP system, that should mean somewhat of a reduced IT effort on your side.
Typically banks will just hand over their file layout to clients, say, here. This is what you need to format to. Where if you have a partner who's already integrated into your ERP system, that connection with the bank should be a little bit easier.
Currently, we offer four payment types as part of AP Optimizer, virtual card. ACH, check and wires, with both virtual card and ACH offering ability to our clients to earn rebates, what we'd refer to the ACH side as premium ACH. So what that means is that your suppliers are willing to take a cut on the ACH payment for things like enhanced reporting.
So the supplier might want to get a custom AR file. And for that, they're willing to take, let's say, a 130 basis point cut on the ACH payment. Well, that rebate is shared back with the payer, so it's a way for you to help turn your AP into a profit center. Clients are always asking about future roadmap and what the future holds. There's a lot of talk right now with integrating with international payments, with integrated payables. And we're looking at doing that in the next one to two years.
From a B2C perspective, looking at Zelle. From a B2B perspective, looking at real-time payments. So, again, you want to make sure that the provider that you're looking towards has all the payment types that you need in order for you to make payments in one consolidated file.
Next is the reconciliation piece. So banks frequently have not done well with reconciliation. That's always been a pain point for clients. So, again, look for a provider that has that seamless integration from their AP automation solution back into your ERP system. And with AP Optimizer, not only do we offer that, but we also offer, on the supplier side, reconciliation as well.
So, again, suppliers can elect to receive that customized AR file to upload into their systems. We offer a Supplier Portal for suppliers to be able to view invoices and payments online, which helps you with getting calls to your AP team for things like, what is the status of this payment and whatnot.
Dan touched a little bit on the supplier network. Our supplier network does have 425,000 middle market and large corporate suppliers. And I feel that that's important to call out because there are providers out there that will say, well, we have over a million suppliers. But you really need to look at who's in the network. A lot of those larger networks are things like small business suppliers, so things like your local dentist might be a supplier in that network, which typically doesn't do a middle market or a large corporate company much good.
So just to recap what you should be looking for in an AP automation partner when you're looking for a solution is first of all stability. You want someone who's been around for a while with proven experience. Fintechs get bought and sold regularly. You want somebody that has tools for fraud mitigation. We talked a little bit before about the account validation services. You want to make sure that that is offered as part of your AP automation solution.
Dan touched on the unified outreach for the supplier onboarding. So things like reaching out to your suppliers and doing the work for you to onboard the suppliers with virtual cards, premium ACH, standard ACH, checks, et cetera. Again, look into how well they integrate into your ERP system. That's a big one because that's going to ultimately help save your IT folks some work.
And then finally, what does the implementation look like? What does the end-to-end process look like? And what does the support team look like? Making sure that you have the go-to-market strategy that you need in order to be successful. So now we're going to jump to the next part of our talk, which is the numbers piece of it. And we're going to move on to the next slide talking about paper invoicing cost by the numbers.
So this slide has a lot of statistics, but I find them kind of interesting. So the first two boxes on the left, the first one is that 12 to 14 billion invoices are issued annually. And experts estimate that 75% of those are paper based. That's a lot of paper, and that's a lot of room for improvement for invoice automation and electronification of invoices.
What we've been hearing for the last six months since the pandemic started is that our clients are interested in getting invoices electronified to just because you've got so many staff working remotely. And if you have paper going to one place, how do you get those paper invoices distributed to the staff who's working remotely?
Now moving to the top right, the cost savings of $4 to $8 per invoice with electronic invoicing, this is the general range that we use when we're working with our clients to do business cases as to how much they can save by moving to electronic invoicing. Some clients are higher if they're more manual. Some clients are a little bit lower if they've got some automation already in place. But this is generally the range that we're seeing when we're helping our clients build business cases.
From the expert's perspective, yeah, they're estimating that's $45 billion to $150 billion could be saved if people move to electronic invoicing. That's a huge range. So regardless of whether you believe the $45 or the $150 billion, that's still a lot of room for improvement.
And last but not least is the environmental impact, the last two bottom boxes. So 200 tons of paper could be saved annually if we moved to electronic invoicing and 360 tons in annual reduction of greenhouse gas emissions. That's a lot of trees saved each year. And when you think about what's going on on the West Coast, that's a pretty big deal right now. So with the environmental impact and everything, it really behooves us to try to electronify our invoices.
And I think about what it's going to look like 20 years from now when today's kids are in the workforce and they're looking at us and laughing and thinking, you guys used to have paper for this? Because it just doesn't make sense. So that being said, we're going to jump to the next part where Bryan is going to walk us through what a simple business case looks like and what we walked through with our clients for AP automation.
And Brian, I believe you're on mute.
Thank you, Brianna. I was just sharing the-- first of all, thank you, Robert. And also sharing the fact that being West Coast-based, we've had lots of fires and a lot of smoke out there. So it almost seems like trees are a bit of a luxury these days. So certainly driving towards automation and moving paper out of the system is a great call.
So what I'd like to do now is actually just share with you a bit of what it looks like when we take in a vendor history file from you. So if we wanted to sit down and take as best of a view into your existing spend file, and then understand how taking that spend file and matching it up against our network of over 425,000 vendors, what the outputs would look like in terms of a spend.
So how spend would fall across, let's say, card, premium ACH-- and Robert spoke of some of the benefits there-- and then also basic ACH. So in this particular slide, you'll note that we're just reflecting really what came in as part of the vendor history file. So the close to 1,300 vendors and close to 12,000 transactions and around $125 million in spend.
And then we pare that down a bit just to look at actual realistic targets, so eliminating the sort of, let's say, government payments, payment to individuals, utility payments, or let's say transactions under a certain amount. So once we take that and we look at the actual projected conversion, again against the network, in this particular case, we're seeing somewhere close to a 69% to 70% conversion rate for not only vendors, but also the transactions and the respective spend.
So just a tremendous opportunity to move from paper to electronic across the board. And then if we look at that spend of, let's say, the $63 million a little bit closer, you'll notice that $7 million of that falls across virtual card, knocking out around 1,300 1,400 transactions. And then on premium ACH, another 5 million, we maintain at program maturity, knocking out close to another 1,500 transactions annually.
And then on the basic ACH side, $51 million we would be able to move over from paper to electronic form of payment, removing close to 3,700 what were typically in most cases we've seen are, again, in-house paper checks. So a great opportunity to help drive the paper out of the system and any of the related manual steps.
So with that being said, let's actually now look at what a net annual benefit analysis might look like based on the spend conversion from paper to electronic. So here you'll note a few things. So first is that, again, this is a net annual benefit. It's organized by payment type across the rows. And it also includes a row for the invoice automation piece.
The payment cost savings and the rebates are based on, again, migrating paper to an electronic form of payment. And the variables supporting these results include some general assumptions. And a lot of times we'll sit down with you, and we'll understand if you do know your cost per check, for example, in-house cost per check, that would help us drive the model here.
Similar, if you have an understanding for what it would cost to process an invoice in your organization, we would also use those more relative numbers to your business to help drive a more accurate output. The other item that I just want to note here is, again, as you see in the lower right hand corner, we're going to have a grand total.
But given a little bit of one at a time, let's actually drill down into some of the more specific areas. First let's talk about rebates. So you'll notice here in the upper left hand corner from that virtual card spend of around $7 million, you would see around $107,000 in rebate. And there's a cost savings because we're moving from a paper to electronic form.
So there's no transactional cost anymore. Where those check costs could have been, let's say, $3 to $5 and in some cases as high as $7 per check, we're able to completely eliminate the transactional cost and actually get a rebate. So, again, starting to move more from a cost center towards a profit center.
Similar on the premium ACH. So, again, as we talked about the value associated with vendors wanting to receive information in a specific way for the remittance data to be, for an example, a CTX file, and then to receive that in a true transmission versus them having to plug in information and helping them drive automation. And then we're able to recognize that additional, say it's around 150 basis point fee that the vendors are willing to pick up.
And within our network, we have what are called open acceptance. So what does that mean? That means that vendors within the network, it's more of an opt out. They say, look, if you've got a payor that wants to pay us in this way, absolutely we'll receive the payment. You don't need to call us or email us.
So, again, another great way to see a day one uplift of paper to electronic conversion, and then not only uplift of that conversion, but eliminating the transactional cost and driving further rebate. So it's another opportunity to harvest rebate for those vendors that might not be best aligned for the virtual card or who may, over time, because of, let's say, a large amount of spend, they fall off and tend to fall down towards a premium ACH or ACH.
So the summary here, driving rebate, driving cost reduction. And then the invoice payment side, we touched on a little bit. Clients are often seeing somewhere between $4 and $8 in cost savings per invoice. We're seeing anywhere from $8 to $10 cost, I would say, on average to process an invoice within an organization.
And so in this particular case, I believe this example was around 18,000 invoices per year. And if we assume about a $10 per invoice to process, that would be around $180,000. And then that would drive us towards the end result in net annual benefit. So in this case, it's a $311,000 net annual benefit on about a $125 million spend file.
So hopefully that's given you a little bit more perspective just in terms of the business case and understanding the actual true hard dollar value that you could see from launching a solution with AP Optimizer. Let's talk about some of the things that you could do next to help support you on that journey.
So first is obviously feel free to reach out and contact your U.S. Banking partner. We're here to help, and we actually have a lot of fun doing this. We look forward to rolling up the sleeves and digging in. And as part of that process, we'll review your business for AP processes. So we'll look at, where are those manual steps? Where are the squeaky wheels? Where can we reduce paper and manual processes in the system?
And then the last piece is just starting to explore and prioritize those. So is it a modular approach, where you say, hey, we want to start with payments, and then we want to do the invoice piece? Or perhaps more of a full movement towards the invoice and the payment automation together? And the great news is with the ERP, the more turnkey ERP integrations that we're able to provide, it really takes the time and the resources off of your hands, enabling you to focus on your core business and core competencies.
So those are some of the core areas that we can continue to engage on that front. So before we wrap up, I'd like to inform you of our next month's webinar. And in this particular webinar, we will be covering a few items. So first is going to be the online security for better business banking. So that's actually going to be the focus. The meeting's going to be held on Thursday, October 29, at 11:00 AM Pacific.
And if you have any questions in the meantime, certainly feel free to reach out to us. We're very grateful for your time today, your engagement in the poll questions. It's helpful for all of us to learn. We're very excited about engaging with you for our AP Optimizer solution and really just helping you. And even if it means just looking at some bank-agnostic recommendations, we're happy to do that.
So again, thank you for your time, and enjoy the rest of your day.