Picture an accounting department from decades ago. Perhaps you imagine a florescent-lighted room with rows of accountants wearing green eyeshades, closely examining figures on sheets of paper. Accounts payable (AP) employees donned these green plastic shields to reduce the fluorescent glare and improve their concentration.
Fortunately, AP has evolved from this myopic, task-based environment to a dynamic, strategic financial management environment responsible for managing disbursements, compliance, fraud prevention and managing cash flows. Despite this change, many organizations still rely on manual processes. It goes without saying that paper, according to a survey by TAPN (The Accounts Payable Network), still represents over 60% of incoming transactions1.
Current manual processing of invoices is slow and tedious. Moreover, as the data is manually entered and re-entered, errors arise. It’s difficult to know where invoices are in the processing stages; when a supplier calls to inquire about payment, the process turns into a search and rescue operation for invoice identification.
Enter AP Automation
Implementing AP automation streamlines processes to make your organization more efficient. Not only does it reduce costs, it improves profitability through surfacing opportunities such as early payment discounts and automatically identifying duplicate payment.
Why AP Automation Just Makes Sense:
- Reducing costs: Third-party studies, including a report by the Aberdeen Group, reveal that automating efficiencies results in reduction from $6.00-$25.00 per invoice to just $2.002. For companies that process 60,000 invoices or more annually, a $4 per invoice processing reduction can translate in $240,000 savings per year.
- Increasing profitability: According to TAPN, 95% of companies do not take advantage of early supplier discounts3. Suppose a supplier offers a 2% net, 10-day discount. Visibility into the AP process allows you to manage cash effectively, translating into $200 savings for every $10,000 invoice.
- Improving internal controls: Since an automated AP process limits users to authorized functions via segregation of duties and approval hierarchies, incidents of supplier or employee fraud are eliminated.
- Overhauling the supplier process: Lost invoices become a thing of the past, as suppliers benefit from self-service portals for invoice submission. Phone calls or emails from supplier inquiries diminish, since suppliers receive an automatic receipt of invoice submittal.
- Creating happy customers: Self-service portals benefit suppliers, while management and employees benefit from improved response times and more accurate reporting.
- Enhancing quality: Processing time is greatly improved by electronically captured, high-quality invoice data—driving validation and approval processes that reduce delays and unnecessary costs.
- Customizing workflow: A best-in-class, extensible automation solution allows organizations to adapt to changing corporate strategies or policies, acquisition of additional organizations or geographic location.
Ready to build your use case for AP automation? Download this white paper.