The decision to implement invoice processing automation is akin to choosing whether to go to work by car or by horse. If the choice is obvious, then why are so many people still riding their proverbial horse?
You’ve probably heard it all before: by automating invoice processing, you can eliminate duplicate payments, increase efficiency and give management visibility into workflow processes that they never had before to achieve further efficiency gains and even competitive advantage. The average ROI timeframe of a system involving document scanning, indexing, workflow automation, and integration with your enterprise resource planning (ERP) or accounting system typically ranges from six to nine months for the initial investment, and results in permanent cost reductions from a day-forward implementation. Scanning the backfile of invoices and support documentation and/or outsourcing the ongoing PO box receipt, scanning and indexing of invoices offers even more information availability and lower storage costs.
So then, why are companies still manually processing invoices with clerks that could be re-purposed for higher-level work?
One reason is that many organizations have thrown technology at a problem only to find out that the costs outweighed the benefits or perceive that an invoice processing solution is just too expensive and cumbersome. Cost-effective technologies today exist to automate paying an invoice from the beginning, where the invoice enters the organization, to the end, where it is approved and paid. Just like when purchasing a car, you wouldn’t buy a Lamborghini to drive three miles to your office and, of course, that’s not the only viable option.
For larger organizations, invoice processing ROI can be fairly well ascertained. Usually it involves reassigning people and achieving early pay discounts. For smaller organizations, the ROI may require an analysis of the people and processes in place in order to determine the areas where technology can best improve processes.
For instance, being able to process invoices faster may mean that a person can spend more time managing exceptions rather than doing rote work. It may mean that you can grow without having to increase payroll for administrative personnel. It may also mean better cash management by being able to instantly see how much is due in outstanding invoices, what payments are in process, and what aren’t but should be to indemnify bottlenecks.
The key to achieving the benefits of automated invoice processing is realizing that it’s much easier and inexpensive than ever before, for organizations both large and small, and the opportunity cost of not automating accounts payable can far exceed the initial cost of the system and its implementation.
Otherwise, you’ll continue to operate at a gallop rather than keeping up with the speed of traffic around you.