Digital transformation’s impact can be felt across virtually every department, from IT and human resources to asset management and finance. One area which is occasionally overlooked in this discussion, but which is prime for improvement via automation, is the accounts payable department. To see these gains, though, organizations must first understand how AP automation can deliver powerful time savings.
Expensive, inefficient and resource-intensive
As Spend Matters pointed out, the accounts payable department represents one of the top consumers of time and resources in many organizations, and much of this has to do with manual processes for invoices.
“It took nearly 10 days for the average organization to process a single invoice manually.”
According to a 2016 study, two-thirds of companies are still using manual strategies to receive, process and make payment on their invoices. This includes receiving paper or faxed invoices, processing them by hand according to the company’s own rules for matching, validation and approval, and completing payment via check, wire transfer, or another payment network.
Research from the Aberdeen Group discovered that these efforts aren’t just time-consuming, but costly as well – in 2015, it took nearly 10 days for the average organization to process a single invoice manually, coupled with a cost of more than $15. And that’s just for one invoice – most businesses today see anywhere from 500 to 5,000 invoices in need of processing every month.
This type of AP landscape doesn’t just create risks for companies to fall behind in comparison to their competitors, but can cause internal struggles, as well.
“The outdated paper process and lack of well-designed AP technology is costing companies dearly,” Spend Matters noted. “In order for the accounts payable function to keep up with the other silos of business that have been automated or digitized by technology, CIOs and decision makers need to work to implement paperless processes and automated software into the day-to-day application of AP.”
Time-saving benefits of AP automation
Bringing automation into accounts payable processes offeres considerable advantages for enterprises, particularly in terms of time-savings. An automated solution eliminates the previous manual work that was required from AP employees, ensuring that invoices are correctly matched with work orders, validated and approved in record time.
This translates to quicker payments to vendors and customers, thereby supporting the best partnerships and experiences possible.
In addition, best-in-class automated solutions also take into account the most current regulations. Invoices are processed and paid according to overarching industry rules, ensuring security as well as compliance.
But the advantages don’t end here. One study found that automating accounts payable can also reduce the cost of invoice processes by as much as 50 percent.
“For an enterprise, the potential saving is substantial, and that’s without mentioning the number of resources that are freed up in the finance department,” SignUp Software’s Henrik Garvner for The Record.
To find out more about the time and resource savings your organization could realize with accounts payable automation, contact us at SK Global Software today.
