If you have any financial responsibility within your company, whether direct or indirect, you will probably have an opinion on the effectiveness of otherwise of your Accounts Payable processes.
Accounts Payable is one of those functions which would seem ripe for automation: regular processes involving lots of data, some of it in electronic form (and too much not), which typically needs to be matched up to purchase orders and other company authorisations and then becomes the catalyst for payments.
And yet, only a minority of organisations have adopted the technology in full: according to Ardent’s 2020 State of ePayables market research report, only 41% of US businesses today have complete procure-to-pay automation in place.
If your organisation is one of those who have yet to adopt Accounts Payable Automation, it’s time to reconsider your options.
Accounts Payable Automation is no longer a luxury but a necessity. Here’s why:
- Accounts Payable Automation will save you money
Accounts Payable Automation can reduce your AP processing costs by as much as 80% according to data from Frost & Sullivan. And even a 5% reduction in operating costs equals a 30% increase in sales in terms of effect on the bottom line (Gartner Group research).
- Accounts Payable Automation will save you time
Accounts Payable Automation can significantly reduce your invoice processing times, by between 70-75% (Frost & Sullivan). That’s time saved from repetitive, low-value tasks that can be better spent on more value-adding activities such as data analysis, process optimisation and supplier management.
- Accounts Payable Automation systems can make money for you
Having full information on all the invoices coming up for payment will enable you to take advantage of any early payment discounts and may also highlight opportunities to negotiate volume discounts based on previously-unknown consolidated totals. According to data from TAPN, a 2% early payment discount is equivalent to a 36% annual interest rate. Optimising your operations to qualify for such savings can translate directly to the bottom line.
- Accounts Payable Automation will reduce errors
Any manual system of accounts processing inevitably allows room for mistakes such as incorrect data entry, misfiling or losing documents, duplicate payments, underpayment and overpayment. Automating your processes as much as possible will enable your systems to recognise inconsistencies and flag exceptions to the appropriate people.
- Accounts Payable Automation will improve the visibility of business-critical information
Accessing full invoice data in an easily available format enables business management to make better, more informed decisions as a result. Amongst the information finally available in a timely manner: spend analysis, cash flow management, working capital and other key financial metrics.
- Accounts Payable Automation will provide you with real-time access to information
Accounts Payable Automation can help provide you with a big picture overview of your company’s performance instantly, in real-time. Centralised and consolidated data, both current and historic, will enable you to compare and evaluate your progress in time to implement any necessary modifications.
- Accounts Payable Automation means your data is safe, secure and readily accessible 24/7.
Most Accounts Payable Automation systems store your data in secure repositories in the cloud. No more pieces of paper lost on someone’s desk or suddenly unavailable when a local server crashes or is hacked.
- Accounts Payable Automation systems are intelligently integrated
Business operations typically require integration with a variety of software systems such as email, CRM, accounting and your own specialist technology. Accounts Payable Automation systems can be integrated into both standard and custom technologies, two facilitated automated information sharing.
- Accounts Payable Automation systems reduce opportunities for fraud
Efficient Accounts Payable Automation systems will verify incoming invoice data against your existing records, minimising opportunities for fraudulent behaviour. Duplicate invoices or invoices for more than the agreed amount will be quickly flagged with minimal effort.
- Accounts Payable Automation systems enable more accurate forecasting
Once you have all relevant information in your system and available to you, it will be much easier to forecast your financial needs and plan accordingly.