Deciding to digitize incoming invoices and automate invoice processing is a smart choice that can significantly benefit your organization, especially if you regularly process a high volume of invoices or have multiple locations that make efficient processing difficult. Invoice scanning allows you to quickly and securely access important AP documents from your computer or mobile device, and AP workflow automation allows you to process them faster, lowering operating costs. And these benefits are just the tip of the iceberg!
The sooner you embrace automation, the sooner you can improve your business’ efficiency and boost your ROI. Let’s take a closer look at the specific reasons you should automate your AP department now.
Why More Businesses Are Choosing AP Automation
Processing paper invoices manually is a drain on resources. It is time-consuming, monopolizes the time of employees whose skills can be better utilized, and wastes square footage on storage when it could be utilized for value-added activities instead. When all these inefficiencies add up, they can have quite a negative impact on your business’ bottom line. In fact, inefficient processes that take too long to complete and excess paper are two common pain points today’s AP departments face.
Entering invoice information into a business accounting system, along with verifying, correcting, and updating it, can take countless hours each month. According to the most recent AP/AR Benchmark Survey by Aberdeen Group, it takes on average 17.83 days to process one invoice, from receipt to settlement. In addition, paper invoices are easily misplaced, can be cumbersome to access, and make it difficult to keep critical financial data secure throughout processing and during storage—a big potential liability come audit time.
By decreasing the time it takes to process and pay invoices, your company can more easily capture early payment discounts and strengthen vendor relationships. Additionally, eliminating the drain on staff in preparing for an audit and avoiding the threat of fines for non-compliance strengthens the bottom line and delivers a high ROI. You can counter these inefficiencies all at once by implementing AP workflow automation software.
Workflow automation for AP processing, used in conjunction with a digital document management system, creates a positive trickle-down effect that benefits the whole company, not just the accounts payable department. According to PayStream Advisors research, organizations experienced the following improvements after implementing AP automation:
- 66% reported a reduction in paper invoice volume
- 62% registered quicker approval of invoices
- 40% saw better visibility into unpaid invoices/liabilities
- 35% recorded an increase in employee productivity
- 30% saw a decrease in overall AP processing costs
- 13% saw a reduction in late payment penalties and interest
How AP Automation Works
AP processing automation starts with outsourcing your mailroom. With a digital mailroom, every invoice you receive—via mail, email, or both—is prepped, scanned, and meticulously indexed by your trusted document management partner. After this, there are two general paths for routing, tracking, and processing your invoices digitally:
- Full automation. Once all incoming invoices have been digitized and indexed, they kick off an automated workflow based on your business rules, which electronically routes scanned invoices for review, approval, and processing.
- “Straight-through” PO-based invoice processing. After digitization and indexing, data is pulled directly into your accounting system for immediate processing, based on PO matching. There is no need for any manual data entry unless there is a PO mismatch. This can limit the number of invoices you have to “touch” to those that require exception handling.
Both paths increase productivity, improve accuracy and significantly lower invoice processing costs.
The Benefits of AP Processing Automation
Workflow automation is a smart investment. PayStream Advisors data shows that you can lower your processing costs from as high as $15/invoice to $6.70 or even $2.36/invoice, depending on the level of AP automation you choose for your business.
The most important factor as you get started with AP automation is choosing the right workflow automation partner with the right solution that is proven to deliver these five benefits and a strong ROI:
- Cost Reduction. Many companies report a 30% reduction in invoice processing costs, mainly because their employees in the AP departments can focus on high-value tasks instead of wasting their time on repetitive tasks.
- Decreased Cycle Time. Many organizations report up to 40% of incoming invoices are processed completely hands-free, expediting processing times.
- Improved Visibility. AP automation software allows for better monitoring of cash flow, payment status, and employee workload.
- Better Cash Management. Thanks to greater visibility, management can make educated, data-based financial decisions.
- Integration. AP automation software allows correspondence and supporting documentation to be directly accessible through your accounting system, so more information is available when manually processing specific invoices.
Boost your ROI with AP Automation
AP automation is a smart digital solution with myriad benefits. You’ll enjoy faster invoice approval times, a reduction in your AP processing costs, easy access to relevant data for making educated strategic business decisions, and fewer challenges when it comes to preparing for audits. Stay competitive—streamline your business with AP automation starting now.
Get a better understanding of how you can achieve a high ROI by automating your AP process. Sign up for your free, customized AP automation demo today.Sign up for a demo