Accounts Payable (AP) is one of those business-critical departments that likely conjure up a fairly intimidating scene in your head – your frazzled AP team poring over files, comparing numbers, tracking down approvals, paying invoices & worrying about regulations.
There is no doubt that employees in AP do some very difficult work that the business can’t do without. Automation can make that difficult work much more manageable & many companies would be happy to give their workers a more streamlined & less intensive process. Unfortunately, other business initiatives — usually customer-facing— tend to dominate focus so AP often fails to get the attention it desperately needs & deserves.
It’s time for change!
The benefits of automation for both you & your vendors are too profound to overlook any longer. With a less burdensome path to implementation & new mobility features, automation is an absolute necessity for any business processing large amounts of invoices.
Save money & reduce transaction times
From a strict cost-benefit standpoint, automation technology is now powerful enough to make a very persuasive case. A white paper by The Hackett Group1, a worldwide consulting firm, shows that the more businesses automate their AP systems, the more they reduce costs & transaction times.
Saving almost 40 percent per invoice will add up to sizable savings very quickly. Based on the values in the chart above, a company processing 400,000 invoices annually will save $1.27 million — far more than it costs to invest in & implement automation.
The savings in transaction time — valuable in their own right — point to further benefits. AP has to handle standard invoicing as well as special cases & those exceptions to the rule can require lots of time & attention to resolve. With automation software looking after the invoices that fit the rule, workers in AP can afford to focus on the exceptions. It’s the ideal division of labour for a department with a mixture of systematic tasks & issues requiring real problem solving.
Finally, automation can help your realise the benefits associated with early payment discounts. Earning the discount requires first identifying & then processing particular invoices by a particular date. And if an AP clerk has a stack of invoices to process, those particular invoices may not be reached in time. Opportunities for savings may fly out the window — all because of the pace & tedium of a manual process. With every business placing a premium on cash management, you want to benefit from the discounts available to you. An automated procedure can help you do just that.
Recognize ROI faster
Despite the benefits, the costs of implementing automated processes have traditionally been a barrier. With a limited IT budget, priorities tend to fall elsewhere. But automation solutions provided by third parties are much more accessible now, thanks in large part to their availability as an outsourced offering or deployed in a software-as-a-service (SaaS) model. Rather than investing in expensive new hardware, you utilise your vendor’s infrastructure to reap the benefits of automation which means no large upfront costs & immediate recognition of ROI.
As long as AP remains manual, requiring workers to be in their offices to do their jobs, it won’t operate with the speed & flexibility that are the hallmark of business processes today. With mobile connectivity, however, processing an invoice or getting approval can happen much more quickly. And when waiting time is reduced, productivity is increased. By putting workers in touch with invoices regardless of time & place, mobility also cuts down on the possibility of late payments — always a chief concern in accounts payable.
Automating AP processes is no longer a nice-to-have. The potential savings in time & money can be vast — and the lower costs make these upgrades available to companies that previously considered them out of reach. Upgrading AP processes is now attainable, strategic & critical to your business’s success. It’s time for change
Learn how other Canadian companies are strategically automating their AP processes to save their teams time & money at www.ricohchangemakers.ca.