Workflow automation streamlines your business processes to reduce inefficiency, provide transparency, and lower costs to generate greater ROI. While automation is a proven method of improving your processes that can lead to wins down the road, it’s not a magic pill to fix what ails your business. That’s why we always recommend starting small as you introduce automation so you can identify what works best for your business before rolling out the solution to other areas.
Automating your accounts payable department is an excellent way for your business to get started. When you automate invoice processing, you eliminate inefficient manual processes that slow payments and can result in financial penalties due to processing errors and lateness. It also allows employees who would otherwise be buried under paperwork the freedom to focus on higher value initiatives and activities that help your business grow and succeed.
When you set up automated invoice processing, here are the four improvements you’ll soon begin to notice:
1. Smoother workflow
When you rely on employees to manually process invoices, your business is susceptible to a world of inefficiency and risks. Invoices can be easily lost or misfiled, leading to wasted time spent trying to find them when you need them. Not to mention the inevitable mistakes that go along with manual data entry – after all, to err is human.
Automation eliminates unnecessary manual steps, preventing errors and saving time. That means documents will flow easily through your AP processes without getting stuck in bottlenecks along the way. Think about your current AP process; the steps that take the most time are probably the ones that require approval from someone, right? With AP automation, invoices and other documents are digitally routed, so an approval can be completed in just a few clicks before passing automatically to the next step in the process.
2. On-time, verifiable payments
Late payments or a scattershot payment schedule can cause significant damage to your business, especially when it comes to supplier relationships. Not only will one late payment warrant a financial penalty, but consistently late payments could cause suppliers to discontinue business with you, leaving you scrambling to find replacements.
Digitally routing and tracking invoices with AP automation provides instant visibility into your cash flow, allowing you to keep tabs on the status of every invoice and get closer to the best-in-class invoice processing time of four days reported by Ardent Partners.
Table 2: AP Benchmark Performance, Best-in-Class vs. All Others
|Cost to process a single invoice (all-inclusive cost)||$2.74||$15.02|
|Time to process a single invoice||3.5 days||12 days|
|Invoice exception rate||11.5%||19.9%|
|Percentage of invoices processed “straight-through”||11.5%||18.1%|
|Percentage of suppliers that submitted invoices electronically||51.1%||18.9%|
|Percentage of invoices linked to a purchase order (PO)||71%||21.8%|
© Ardent Partners 2017
This greatly reduces the odds of paying for goods never received or making double payments, both of which lower ROI and tie up funds that are better spent elsewhere.
3. Better audits
Dealing with an audit is a lot less painful with automated invoice processing. The ability to run on-demand reports will allow you to prepare for an audit by pinpointing any discrepancies in advance, and digital access to AP documents means you can pull them faster for speedy response times once the audit has begun. Eliminating the last-minute scramble to find missing documents means audits will be far less disruptive to your staff and audit time won’t be a dreaded time of year anymore.
4. A faster, more competitive business
If you aren’t yet taking advantage of automated business processes, your competition could be way ahead of you. Trying to keep up with competitors who already use automation will become increasingly difficult as customers start to shop around, realizing they can get faster service elsewhere. Plus, as the digital age continues to change the way consumers behave, automated workplaces can quickly respond and adapt while those still relying on manual processing have much bigger hills to climb.
Get on the Path to Automation
Why let the competition maintain their advantage? There’s no time like the present to get your business on the path to operating more quickly, more efficiently, and more profitably. Your bottom line will thank you!
Want more proof that AP automation could take your business to the next level? Check out our free downloadable guide.