Reducing Accounts Payable processing costs has officially become a movement — one driven figurately by the ability to better allocate staff resources and literally through automating transactional information and workflows. In an increasingly competitive business climate, improving the speed and accuracy of processing has become fundamental in achieving measurable growth. Accounts Payable automation is increasingly sought to securely capture all transaction information, which can then be utilized in any number of ways through system integrations that assure contractual-transactional integrity. New technology is shining a spotlight on the priorities of Finance and Accounting professionals, and the truth is evident: the benefits of reducing your company’s Accounts Payable processing costs are too substantial to ignore.
Moving from manual to automated environments increases transaction productivity and cash flow visibility. In a study of AP Management by The Institute of Financial Operations, cost savings and improved accuracy ranked as top justifications for investing in automated accounts payable solutions.
Their peer findings: 9 in 10 organizations still deal, at least in part, with paper invoices and transaction-related documentation, leading to higher costs, stifled efficiency, and a greater chance of erroneous information entering their system.
Highlights From the AP Processing Report
Failure to innovate can have a negative effect on the success of your business, especially when your business relies on outdated, paper-based processes to stay on top of money flowing in and out of your organization. By being the first to innovate, your business gains a competitive advantage over its rivals. The statistics below paint a clear picture of where our economy stands in terms of efficient AP processing:
- 80% indicated their volume of invoices increased or remained roughly the same over the past year; 60 percent reporting the bulk of their increase was paper-based
- 80% confirmed half or more of their invoices arrived paper-based; with a majority reporting paper exceeding 90 percent of their volume
- 60% required between 5 and 25 full-time employees for invoice entry and matching
- 70% had unimproved or increased invoice entry and payment error rates change in the last 18 months
- 7 of 10 said that PO automation is an important component of an AP automation initiative
- The most important drivers to automating the management of POs and invoices: a full 60% stated the desire of achieve better control over spend and ensuring purchases are with preferred suppliers, 45% to eliminate mismatches and exceptions that lead to blocked invoices
- 65% noted the average time it takes to process an invoice changed over the past year has increased or remained unchanged
- Just over half captured a significant amount of early payment discounts contractually available to them
- Regarding imaging, 45% reported using front-end document capture capabilities. 20% included optical character recognition (OCR) to replace manual ERP keying. A mere 10% reported having data extraction and utilization capabilities. These companies could benefit significantly by enabling ERP-integrated invoice validation and routing direct entry into an automated workflow.
Making Your Organization More Competitive With Lower Accounts Payable Processing Costs
The above statistics are indicative of the current state of the industry, but how well do they describe your particular working environment? If the answer is “nearer than you would like,” your potential automation advantages include:
- Eliminating manual invoice data entry to your ERP
- Reducing your costs associated with processing and filing vendor invoices by an average of 75%
- Increasing automation and streamlining your processes via workflow while reducing cycle time by an average of 80%
- Increasing visibility into your AP processes through intuitive, decision-enhancing reports
- Reducing the risk of late payment fees
- Increasing the number of early payment discounts you receive
- Maintaining your existing processes, but automating them to achieve superior results
To learn more about how your business can reduce accounts payable processing costs, read our AP automation guide. Or, learn more about IntelliChief ECM for Accounts Payable for PO and Non-PO invoices by clicking here.