Accounts payable teams are always busy moving purchase orders out and getting invoices in. AP processes require approvals, and with so many hands-on invoices, it can take some time. Luckily, you can implement accounts payable automation to your processing to speed things up.
There are so many benefits of automated AP processing, it can be transformative. The Accounts Payable Procure-to-Pay (APP2P) Network cites five ways artificial intelligence (or automation) can dramatically improve and benefit your AP process.1
The first benefit of automating AP invoice processing is that it can decrease manual tasks and labor costs.
Manual tasks are some of the biggest contributors to high AP processing costs. Human touches come in the form of downloading attachments, scanning documents, manually keying in data, searching for lost invoices, reconciling supplier and PO information, manually-coding invoice information and more.
The Institute of Finance and Management (IOFM) reports that 63 percent of companies state that reducing invoice-processing costs is their number one priority.2 Fortunately, automation can help.
Among other things, automated AP processes mean you are extracting invoice data, classifying documents, matching invoices with purchase orders and receipts, assigning GL distribution codes, and posting and archiving invoices – all quickly, automatically, and with benefits like great labor cost savings.
How much? The APP2P Network compared a manual AP operation with a highly automated one. The average monthly cost to process 5,000 invoices is 85 percent less with automation.
85% less cost processing 5,000 invoices a month by automation versus manually.
Another benefit of automated AP processing is that it can increase productivity. Without an automated AP process, 84 percent of staff time is spent on transaction processing, leaving only 16 percent for value-added activities3. As noted above, automated AP processing eliminates a number of human touches per invoice, reducing the amount of time AP staff has to spend processing each invoice.
With this time gained, staff can attack any invoice backlog or devote their time to other value-added activities. These might include ensuring contract compliance, mitigating compliance issues, rationalizing supplier spend, managing accruals and budgets, managing cash flow, and forecasting budgets.4
Automated AP processing means faster cycle times. Ardent Partners reports that best-in-class performers process a single invoice in 3.6 days, while most companies take 16.6 days.5 This explains why only four percent of businesses pay all their invoices on time.
Slow cycle times can have an adverse effect on business. Cash outlays can be unpredictable and invoices become bottlenecked, which causes a backlog. As a result, this strains vendor relationships and can cause you to miss out on early-pay discounts.
Automated AP processing can greatly speed up invoice cycle times. Think of the most time-consuming aspects of AP processing. Automation positively impacts data capture and entry, invoice validation, and matching, as well as posting to an ERP.
Automated AP processing can help reduce payment errors.
Whether it’s a duplicate payment or transposing numbers while hand-coding, processing errors can come from anywhere, and they all contribute to the hidden costs of AP processing. Luckily, a benefit of automated AP processing is that they help reduce payment errors.
Two examples of automated AP processing reducing payment errors.
Automating AP processing means more early pay discounts, another added benefit. An estimated 80 percent of suppliers offer early payment discounts, and companies with significant automation can capture nearly 75 percent of them. Even organizations with basic automation can capture 50 percent.6
Thinking of automating your AP processing? Consider Ascend Software.
There are so many benefits of automating your AP processing. We may be biased, but if you’re thinking about implementing AP automation for your organization, consider SmartTouch AP from Ascend Software. Established in 1997, Ascend provides business process automation solutions known for their performance and functionality.
A Workday Certified Partner, SmartTouch AP is distributed worldwide and is prominently used in healthcare, finance, hospitality, retail and more. SmartTouch AP is quick to deploy, easy to use and yields quick ROI. In short, it’s intentionally designed to help you do more with fewer steps and smarter touches.
Learn more about how we can automate your AP process.