The accounts payable (AP) process is difficult to tame, yet well worth the effort. The reasons for investing in accounts payable automation are compelling. Yet, while few processes offer such tangible and fast return on an automation investment, many organisations make the mistake of judging AP automation as a low-value activity not worth that investment.
Accounts payable organisations are responsible for reducing costs, improving overall performance, achieving regulatory compliance, increasing visibility and enabling the businesses strategic initiatives. Not only do these goals conflict often, but they also compete for the same resources, limiting AP’s ability to accomplish them.
Many technologies have been applied to the accounts payable process, including financial management systems (ERP), capture, intelligent document recognition, EDI, e-Invoicing, workflow, and the cloud. But industry experts agree that substantial benefits remain to be realized through an end-to-end invoice and AP process automation that these technologies have not delivered.
As The Hackett Group reports in its 2013 Purchase-to-Pay Performance Study, finance departments continue to seek improvement in a range of efficiency and effectiveness metrics that include first pass match rate, on-time payment rate, level of spend visibility, compliance to preferred supplier policies, cost per FTE, transactions per FTE, and invoice processing cycle time. This paper discusses why you should move now to capture the benefits available through implementation of end-to-end Accounts Payable automation.
In a straightforward example, the Aberdeen Group’s May 2012 report, AP Invoice Management in a Networked Economy, measures efficiency leaders at less than $2 to pay a bill, while the majority pays $6 – $25 or more, indicating available savings of more than $40,000 for every 10,000 invoices annually in most organisations. The attraction of investing in technology that pays for itself therefore cannot be resisted.
Creating your own business case for change in how you do Accounts Payable Automation (AP) is a good starting point – there is enough evidence to give you confidence that your case will be compelling.
In addition to the reduction of personnel costs for the capture and entry of invoice data, organizations also benefit from self-service supplier interactions, a reduction in duplicate invoices, increased discount capture, and the elimination of late payment penalties.
Companies such as Computron appear to have some compelling solutions to deliver real results in purposing all pieces of information for AP Automation.