On average, 15% of invoices are recurring: stop checking the same invoices over and over again

From the monthly rent of your commercial building(s) and utility prepayments, to staff phone subscriptions or the fixed costs of the cleaning company. Every organization faces recurring and predictable bills. Data research by ICreative shows that, on average, 15% of incoming invoices are of a recurring nature and occur at least monthly. Exactly the same invoice, from exactly the same supplier, for exactly the same product and exactly the same amount. Is it really necessary to have them by an employee?

Invoices preceded by a purchase order usually no longer need to be checked manually by an employee. After all, the invoice and purchase order can be matched automatically, so one can already be sure that the invoice is correct. That certainty is further enhanced if a three-way match can be made with the goods receipt. 

Basically, if there is no purchase order or receipt that an invoice can be matched with, an employee has to check it manually. This makes sense, of course, because it prevents your company from making a wrong or even fraudulent payment. 

Businesses receive many recurring invoices 

But what if you are already expecting a particular expense bill? For example, because it comes in every month or even every week or every day. Consider invoices for rent or subscriptions, or the monthly bill from the cleaning company you have made contractual arrangements with.

Invoices that are always the same. Invoices from the same supplier, for the same product or service and of the same amount.  

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Businesses receive many such recurring invoices. An analysis of more than 1.2 million anonymized invoices from 2023, shows that as many as 15% of invoices are recurring in nature. That means these invoices are exchanged at least once a month between supplier and buyer with the same amount. 

Manual operations are time consuming

These are bills that you know you will have to pay each month. They often come on a fixed date or time and are therefore predictable.

"Despite the fact that there is often a mechanism in place for semi-automatic processing of these invoices, for example based on templates, there is still a world to be gained," says Erik Vossers, the ICreative consultant who conducted this data analysis. "Each manual operation also involves follow-up operations, which is perceived as time-consuming and unnecessary." 

"So there are people who have to review the same invoices every time. For that, these colleagues have to launch the program, click on the right invoice, look at it and then click on something again to approve the invoice and send it further into the process," Erik outlines. 

15% of invoices are recurring

Erik Vossers: "We need to let people do the work they enjoy"

He continues: "That may not sound like so much trouble until you realize that 15 percent of invoices are of a recurring nature. That can add up considerably if you receive tens of thousands of invoices a year. At the bottom line, it saves a lot of time and effort if these recurring invoices can also be processed fully automatically." 

"I believe we should let people do the work they enjoy and what they were hired to do. Don't make them do stupid jobs, like approving an invoice they've seen 10 times before this year," Erik states.

Automate recurring invoices with a spend plan 

Recurring invoices can be processed automatically through a spend plan, one of the modules in Basware. In such a spend plan, you can define a contract and specify that the invoice from party X will always arrive at time Y and amount Z. Once an invoice arrives with these conditions, it is automatically recognized, matched and approved. 

"Normally, an invoice is matched to an order, which then allows the invoice to be processed and paid automatically," Erik explains. "A spend plan actually works the same way, only this way the incoming invoice matches the established spend plan instead of an order. The predictability ensures that the invoice is matched without a purchase order."

"Don't make people do stupid jobs,
like approving an invoice they've seen
have already seen 10 times before"

Tolerances in deviations 

When creating a spend plan, it is important to think about the conditions you set for the automatic match. For example, does the invoice always arrive on the 26e of the month, or does it sometimes deviate by a few days because of a weekend or holiday?

Do you want the invoice to be fully automatically approved only if the amount matches exactly to the penny, or is a small discrepancy also tolerated? Suppose it is the invoice of a telephone subscription and a colleague has exceeded his subscription by 2 euros once. Do you still want an employee to manually approve the invoice, or is this within the tolerance values? 

Erik: "To best automate this process, you need to set the right parameters. This sometimes results in an interesting discussion. Do you go for 100% control or do you accept a small deviation here and there? In some cases, as in the example of those 2 euros, it is probably more expensive if an employee has to look at it and spend his time on it, than if you take that 2 euro deviation for granted and just pay. Do you think it's worth it?" 

How many recurring invoices do you receive? 

It is important for companies to become aware of how many recurring invoices they actually receive. In fact, there is often little to no overview of this, Erik knows from experience. Then a spend plan provides the ability to automatically approve and process these recurring invoices.

That way, employees no longer have to waste their precious time approving the exact same invoices over and over again and can focus on the tasks that really matter.  

Not sure how many recurring invoices you receive? ICreative is happy to help you figure this out. Of course we are also happy to help you further automate and optimize the processing of these recurring invoices. Please contact us directly.  

Anoek
van der Riet

Contents Specialist

Anoek writes daily about purchase to pay, order to cash and Robotic Process Automation. She enjoys diving into topics such as e-invoicing, working capital and hyperautomation.