Creating an AP Automation Project Justification Using Real-World Numbers
When Justifying Your AP Automation Project, Real-World Numbers Are Your Ally
Creating an AP Automation project justification is at the top of most organizations’ to-do lists. And while every organization has its own unique reasons for automating Accounts Payable, there are several well-documented benefits of Accounts Payable Automation that businesses are eager to take advantage of, including:
- Reduce time spent performing manual data entry
- Maximize early payment discounts
- Eliminate late and duplicate payments
- Increase process visibility
- Control processing efficiency and accuracy
- Reduce, reallocate, or defer resources
The competitive edge offered by AP Automation is unparalleled, but obtaining project approval requires more than a list of presumed benefits. You need real-world numbers that convey these improvements in terms that your company’s decision-makers will understand, respect, and embrace.
Forming Your Accounts Payable Automation Project Justification
When the time comes to deliver your justification for Accounts Payable Automation, vague reasons will pose a significant challenge. You want to be clear, confident, and prepared to show evidence to support your justification. Some common justifications include:
- Saving Time and Money
- Becoming More Efficient
- Eliminating Paper
This a good start, but you should also be ready to take your justification one level deeper:
- How much time and money do you project you can save?
- How will increased efficiency positively affect your organization?
- What is the ROI of eliminating paper?
If you can answer these types of questions with real-world numbers, your justification will be that much more compelling. But how do you gain access to real-world numbers to support your justification? We can help.
Browse Industry Studies, Whitepapers, and Webinars
Industries studies, whitepapers, and webinars are a great place to begin researching Accounts Payable Automation. They are helpful because they serve as a benchmark, provide direction and ideas, and provide access to metrics based on an analysis of other organizations. However, you can’t rely solely on these types of resources to make solidify your justification. Many of these resources are too general or don’t align with the needs of your organization. Furthermore, certain metrics may not be specific or relevant to your organization, especially if the organizations being studied are different than yours in terms of size, revenue, or invoice volume.
Talk to Your Preferred Vendor About Real-World Justification
Generally, when organizations start to compare AP solutions, they quickly identify a vendor that stands out. Needless to say, your first option is rarely your best option, but depending on who you select, you may be able to justify your project more easily by treating this vendor as a strategic partner. For example, our AP experts have helped hundreds of companies justify their Accounts Payable Automation projects. We weren’t the best fit in every instance, but our team is more than willing to share some justification tips for organizations interested in AP Automation.
What to Include When Justifying an AP Automation Project With Real-World Numbers
Your business case for AP Automation should include:
- Your real-world metrics for AP processing
- Hard dollar savings and efficiency savings
- Projected savings over five years
- Projected costs over five years
- Realistic expectations
On a more granular level, you should be looking for:
- # of invoices processed per year
- Average # of pages per invoice
- Percentage of PO vs non-PO invoices
- Percentage of PO-based invoices requiring exception handling
- Percentage of email vs mail
- The forecasted increase in volume per year over five years
- # of AP processors
- Salary, fully burdened, with the hourly rate
- Percentage of expected salary increase over five years
- # of processors expected to add each year over five years
- # of processors expected to add each year over five years with AP Automation deployed
- # of early payment discounts missed annually
- # of late payment fees incurred annually
- # of duplicate payments annually
- Postage costs
- The volume of related documents filed with paper cost
- Cost of on/offsite storage over the next five years
- Cost of current solution or outsource function (if applicable)
- Printing and sorting invoices
- Routing invoices for approval and exception handling
- Data entry
- Calculating conversions (i.e., unit of measure, pricing, etc.)
- Finding and resolving duplicate payments
- Manual filing
- Tracking, reporting, and researching inquiries
What’s Next? Access the IntelliChief Accounts Payable Automation ROI Calculator
Our Accounts Payable Automation ROI Calculator is a great resource to help organizations crunch the numbers and forecast potential cost savings. Once your figures have been entered into the ROI Calculator, it generates the hard dollar savings in terms of cost and efficiency in the first five years of your project. With this helpful tool, you can compare your current costs to what they would be in an automated environment.
For your free Accounts Payable Automation ROI Calculator, contact IntelliChief today.