Is Your Accounts Payable Department Always In The Dark?

Do You Feel Like Your AP Department Is Operating In The Dark?

Studies show  that best-in-class companies outperform  other businesses by automating their invoicing processes, and other key business  processes, with document imaging and workflow stems. According to Aberdeen Research’s “Invoicing and Workflow”  study, businesses that automate their account payable operations reap significant advantages—including processing their invoices significantly  faster and at much lower cost.

For companies that fail to automate, the  study found, “Paper invoices and manual processing  continue to hamper accounts payable operations, keeping suppliers in the dark and failing to give accounts payable the visibility it needs to actively manage organizations’ cash positions.”

Best-in-class companies, on the other hand, overcome this impediment by pursuing  “comprehensive accounts payable automation to drive continued  performance improvement.” The end goal is to maximize the impact of automation on all accounts payable processes, from receipt to scanning to approval workflow through payment.

How well does automation improve invoicing operations? According to Aberdeen’s research, best-in-class companies outperform their peers by a considerable margin, taking 3.8 days and a cost of $3.09 to process an invoice vs. the  industry average (middle 50%) of 9.7 days and $15.61 per invoice. For  the bottom 30%, it takes 20.08 days at a cost of $38.77 per invoice.

Respondents who implemented document imaging and workflow automation reported 21%  lower invoice processing costs than others, while also securing early  payment discounts on more than twice the number of transactions. Further  improvements, the study found, can be gained from integration with  back-end financial and ERP systems and the use of performance-monitoring dashboards.

A Surge in Workflow Deployment

Aberdeen Research’s findings jive with those of PayStream Advisors’ latest “Invoice and Workflow Automation"  survey, which showed that electronic invoicing and automated workflow  are both experiencing increased adoption, as more companies strive to  migrate from a manual paper-based invoice system to an efficient automated system.”

As PayStream Advisors notes, “Skeptics may still doubt the ROI of automated approval workflow, but it is getting harder to defend that position in the face of the facts.”

PayStream Advisors’ study, which surveyed 500 accounts payable professionals, showed that the top three financial automation technologies that have  been most useful include eInvoicing, workflow, and front-end  imaging/OCR.  Electronic invoicing and automated workflow are the top  automation goals for accounts payable in 2013, the study showed.

The  number-one benefit cited for approval workflow was the quicker approval  of invoices (76 percent), while one-half were able to  increase employee  productivity, and nearly 60% reported lower processing costs.

As PayStream Advisors notes, invoice processing can be expensive and time  consuming when performed using manual processes and paper documents, while electronic invoicing and automated workflow can lower costs and  speed up processing. Overall, more than one-half of companies that  adopted eInvoicing solutions cited a reduction in labor or processing  costs and faster approval cycles as key system benefits, as well as greater visibility into spending, improved cash management, and an  increased ability to capitalize on early-payment discounts.

As  workflow technology becomes easier to deploy and more affordable,  including software-as-a-service offerings, more businesses  are able to  obtain the benefits. As PayStream Advisors reported, “The market for electronic invoicing and automated workflow  continues to open up as adoption trickles down from large organizations to small and medium enterprises.”  - See more at: