Accounts Payable Automation has earned its reputation as a game-changer for large and complex organizations that handle tens, even hundreds, of thousands of invoices annually (or more). However, fewer than half of all businesses have implemented some form of Accounts Payable Invoice Automation solution to streamline financial operations.
From Gartner to the Aberdeen Group to the Institute of Finance and Management (IOFM) and the hundreds of ERP-specific user groups located around the globe, the benefits of Accounts Payable Invoice Automation have been thoroughly documented. For most businesses, implementing AP Invoice Automation is no longer a matter of if but when, so getting an early lead amongst your competitors is ideal for achieving industry-leading efficiency in your Accounts Payable department.
Now is the time to work smarter, not harder, and automation is the go-to solution. Here’s why it’s time for your organization to consider Accounts Payable Invoice Automation.
Real-Time Invoice Data and Payment Information Sets the Agenda for Your Financial Operations
Business leaders demand real-time access to tools and data whether employees are in the office or working remotely. This capability is even more critical in Accounts Payable, a department that is oftentimes plagued with inefficiencies related to manual work and non-standardized processes. Accounts Payable Invoice Automation can provide in-office and remote workers instant access to invoice data and payment information, allowing you to streamline financial operations and mitigate document shuffle.
In many ways, real-time invoice data and payment information set the agenda for your financial operations by giving you unheralded visibility into the inner workings of your cash flow. Other benefits include:
- Simplified invoice routing powered by configurable workflows that don’t deviate from your prescribed business rules
- Streamlined exception handling with automated prompts that guide processors on next steps, reducing the time it takes to process non-PO invoices
- Automating PO-based invoices to reduce the opportunity for human error
- Taking advantage of early payment discount opportunities and eliminating duplicate and late payments that collectively cost businesses billions annually
- Mitigating human error by automating common AP tasks, such as 3-way matching and line-item conversions
These benefits only begin to scratch the surface of what your business is capable of when you automate invoice processing. The core concepts of automation are standardization, control, and efficiency. As you will see below, the invoice processing capabilities your business can unlock with automation can have a transformative effect on your business, freeing up the working capital you need to invest in the future and become more resilient in the present.
The Ability to Make Informed Financial Decisions on the Fly Is a Significant Competitive Advantage
Large, complex businesses with dispersed workforces require AP Invoice Automation to ensure best practices, continuity, and scalable operations. When your organization’s footprint is spread out across multiple cities, states, or countries, staying on top of Accounts Payable takes a concerted effort. Unfortunately, as companies grow, these mission-critical business units have a tendency to become increasingly isolated, resulting in information silos.
When information silos are constructed, making informed financial decisions is nearly impossible. AP Invoice Automation helps to tear down these walls and connect personnel by supporting a centralized, digital repository where invoices and other AP-related documents can be stored, retrieved, and managed by permitted users within the organization.
Furthermore, once these documents have been consolidated, they can be reviewed and analyzed to empower financial decision-making. Leveraging analytics and business intelligence from automation, organizations understand the intricacies of their cash flow in greater detail than ever before. Some examples of the insights gleaned from this technology include:
- On an individual level, how fast does each approver work?
- What is the average amount of time it takes to process an invoice?
- Where are invoice bottlenecks most likely to occur?
- How many early payment discount opportunities are being missed each month?
- Which suppliers offer the discount terms?
- How many PO vs. non-PO invoices are received each month?
- How long does it take approvers to reconcile invoice exceptions?
Without automation, finding the answers to these questions can take days, weeks, or even months. You may need to organize an internal audit to get the clarity that AP Invoice Automation can provide instantaneously via built-in reporting and analytics tools.
AP Invoice Automation Helps Your Organization Scale With Ease
Mergers, acquisitions, global expansion, and departmental reorganizations are par for the course for successful businesses. Responding to these changes is essential, but it’s easier said than done — especially when it comes to Accounts Payable. When your team of processors is suddenly facing twice as many invoices as usual, you’ll need to devise a plan for scaling operations to meet the growing demand.
Invoice Automation is scalable and agile. When invoice volume spikes, automation will process the majority of new invoices, diminishing the potential burden on your team. They will still be responsible for certain invoice exceptions, but they won’t be faced with twice the workload.
Connecting systems of record is another challenge for growing businesses. Invoice Automation can integrate with multiple ERPs to improve connectivity between disparate business units. This saves businesses a lot of time and stress since there’s less of a need for strategic reorganization and other problems of scale.
What to Consider When Choosing an AP Invoice Automation Solution
Choosing a partner for AP Invoice Automation is an important decision — one that will affect your business for years to come. It’s important to fully understand what your chosen solution offers in its Accounts Payable software. Here are a few noteworthy considerations:
- Can the solution provide touchless, end-to-end invoice processing? (i.e., capturing invoices, coding/allocation, approval routing, data entry to ERP, etc.)
- Has the vendor deployed their solution for another client with the same ERP as your organization? Are there any case studies or testimonials for those clients?
- How long has the vendor been implementing AP Invoice Automation solutions?
- Does the vendor outsource any part of their development or customer service, or do they handle these functions in house?
- What is their support plan? Do they provide continuous support before, during, and after implementation?
- Does the solution allow you to measure and track process performance KPIs, such as cost per invoice processed, # of invoices processed straight-through per versus manually, average percent of invoice exceptions, average time per invoice processed, reduction in received not vouchered invoices?
As your organization compares Accounts Payable Invoice Automation vendors, keep these questions in mind to ensure that you are focusing on the capabilities and features that will have the most significant impact on your business.
Where Does Your Organization Stand With Accounts Payable Invoice Automation?
According to IOFM, 14 percent of businesses process supplier invoices in a completely manual environment. These businesses require weeks to process invoices that their competitors are processing in mere days. If your organization is still processing paper invoices manually, your cost to process an invoice can be anywhere from 4x-10x greater than your competitors.
Still, this only accounts for 14 percent of businesses. Your organization likely has some degree of automation – or at least digitization – to speed invoices along your queue. Let’s see how the rest of the field stacks up:
- 6 percent are not very automated and have no plans to automate
- 27 percent are not very automated but plan to automate further
- 11 percent are largely automated and do not plan to automate any further
- 44 percent are largely automating and plan to automate further
- 9 percent are fully automated and have effectively eliminated manual processes
Look at these numbers and consider where your organization stands. Have you done enough to automate invoice processing? Do your still view your AP department as an inefficient cost center? By acknowledging your existing strengths and weaknesses, you can take the necessary steps to improve further.