In short: A new supplier costs far more than the purchase itself. Before the first invoice is paid, someone has to request the vendor, check company and bank details, run compliance checks, create the vendor in the ERP and approve it. After that, every invoice has to be matched and paid, and the vendor record has to be maintained. For a supplier you use once, that fixed cost can easily exceed the value of the order. A single creditor removes most of it.
Where the cost comes from
The cost of a new supplier is spread over several teams, which is why it is rarely visible in one budget line:
- Request and approval: an employee fills in a vendor request form, and a manager or procurement approves it.
- Checks: company registration, VAT number, bank account verification, and often sanctions and compliance screening.
- Creation in the ERP: master data entry, payment terms and a second person to approve the bank details.
- First invoice: the invoice often arrives without a PO number or in an unusual format, and needs manual matching.
- Payment: a payment run, sometimes an urgent or advance payment because no payment terms were agreed.
- Maintenance: updates to bank details, periodic reviews, and clean-up of inactive vendors.
What the benchmarks say about invoices
Invoice processing alone already differs a lot between organisations. According to Ardent Partners' State of ePayables 2025 report, the average cost to process an invoice is $12.42, while the best-performing organisations process an invoice for $2.65. Small, one-off suppliers usually sit at the expensive end: their invoices are on paper or PDF, often without a PO number, and need more manual work.
A simple way to estimate your own cost
Benchmarks for vendor onboarding vary widely, so the best figure is your own. Count the internal hours for one new supplier and multiply them by an average hourly cost:
- time to request and approve the vendor;
- time to check company, VAT and bank details and run compliance screening;
- time to create and approve the vendor record in the ERP;
- time to match, approve and pay the first invoice;
- time spent on questions, reminders and corrections.
Even when each step takes only half an hour to an hour, the total quickly adds up to several hours of work for a supplier that may receive one order. Multiply that by the number of new vendors created each year, and add the effort of keeping hundreds of inactive vendor records clean.
The cost you do not see
- Risk: every new bank account is an opportunity for payment fraud or errors.
- Delays: employees wait for the vendor to be created before they can order, or they pay with a personal card and claim it back.
- Master data quality: duplicate and outdated vendor records make reporting and audits harder.
How to avoid the cost
For strategic and recurring suppliers, the effort pays off: you need a direct relationship, a contract and often a catalogue. For one-time and occasional suppliers, it usually does not. With a single creditor, Spot Buy Center onboards, checks and pays the supplier on its side. Your organisation keeps one creditor in its ERP, receives one digital invoice per purchase order with your PO number, and pays on its own payment terms.
Frequently asked questions
When is it worth creating a new supplier?
When you expect regular purchases or significant spend, or when a contract and a direct relationship add value. For a one-off purchase, it rarely is.
Can employees still buy from the supplier they want?
Yes. With a single creditor they can order from any supplier or web shop; only the vendor record in your ERP is avoided.
How do we know our own cost per new supplier?
Map the steps above, ask each team how long they take, and multiply by your hourly cost. Our tail spend ROI calculator helps you build the business case.
Read more about paying a one-time supplier without creating a new vendor, one-time vendor payments or talk to us about your tail spend.
