Research shows that Accounts Payable (AP) Automation is yet again the way forward for cost savings and improved efficiency. Enterprises are increasingly aware that paper and people-based processes lead to high Accounts Payable (AP) transaction costs and missed business opportunities. In a recent survey by Ardent Partners, 42% of the organizations interviewed stated that they were experiencing delays in receiving invoices and/or difficulties in information matching. Other issues were high processing costs, too many exceptions and delays in making approvals.
The research also has some exciting findings for Accounts Payable (AP) teams who are following best-in-class processes. Not only are they making headway in reducing the time it takes to process invoices and lowering the associated costs, they’re gaining recognition within their organizations as strategic partners.
It breaks down the Accounts Payable (AP) automation issues faced by organizations and highlights the statistics that show there are major benefits to be gained in implementing an AP automation system. It also shows the criteria for selecting a solution provider and the importance of choosing an experienced AP automation solutions provider such as Yakidoo to guide you through a proven process.
As exhibited in the chart below, best-in-class accounts payable performance significantly lowers processing cost and time per invoice, reduces the rate of exceptions, and raises the rate of straight-through processing, electronic invoice submissions, and invoices tied to purchase orders.
AP Performance Comparison, Best-in-Class vs. All Others
Key factors driving change
Time and money
Time and money are the key drivers for AP automation. Along with high paper usage, most AP departments still suffer from high AP transaction costs and cycle times. The top two pressures driving organizations to reassess their AP function are lowering invoice processing costs and improving and standardizing the AP process. According to The Institute of Financial Management`s recent report, that best-in-class enterprises report:
- Invoice processing costs that are about 81% lower than those of their peers
- Invoice processing cycle times that are around 73% faster than their peers
Other reasons why organizations focus on electronic enablement of AP transactions area:
- The use of preferred suppliers when purchasing is easier to control
- Fewer exceptions and thus, less blocked payments
- An easier process for suppliers to follow when submitting invoices
- Fewer mistakes made during processing
- Better visibility into cash flow
- A more strategic positioning of the AP department within the organization
Top automation priorities
Based on survey results by Forrester, the following emerged as top automation priorities3:
Projects related to imaging, capture, and matching were at the top of the list in a 2015 AP technology survey by the IOFM, signifying that many companies are still far from transitioning to processing invoices digitally. IOFM reported that 78.4% of respondents employ straight-through processing on less than half of invoices.
Automated workflow and approval for invoices were another high priority for respondents to the IOFM survey. Solutions were either in progress or scheduled to begin implementation within three years for 88% of those surveyed.