This blog series is based on the abstract of the Levvel Research 2019 Insight into Payables Report written by Mark Brousseau, consultant, Institute of Finance Management (IOFM) spokesperson, and AP automation subject matter expert.
Accounts payable departments have seemingly spent years discussing the merits of automation.
A new report produced by Levvel Research and sponsored by Yooz suggests that the profession has finally moved on. Accounts payable leaders are now focused on how to automate, rather than “why.”
This is welcome news in a profession where manual, repetitive tasks have resulted in processes that cost too much, take too long, create too many errors, provide inadequate visibility, and frustrate suppliers and stakeholders.
Why Should We Automate?
We all likely the know the answer by now. The consequences of processing invoices in a manual or semi-automated manner are well illustrated by the top pain points that accounts payable departments experience in their approval workflows:
- Manual data entry and inefficient processes
- Manual routing of invoices for approval
- Lost or missing invoices
- Majority of invoices received in paper format
- Lack of visibility into outstanding liabilities
And the benefits of automating are clear:
- Reduction in paper invoice volume
- Quicker approval of invoices
- Improved visibility into unpaid invoices
- Lower overall accounts payable costs
- Increased employee productivity
While most U.S. organizations still receive most of their supplier invoices in unstructured formats such as paper and e-mail, enterprises have made significant headway in pushing their supplier invoices to a portal or XML/EDI format, which typically require little or no human operator intervention. Paper accounts for only 22 percent of the supplier invoices received by enterprises, per Levvel Research. What’s more, 65 percent of enterprises now use an automated solution to capture invoice data. And half of all accounts payable departments use an automated solution to route invoices for approval.
As more accounts payable departments embrace automation to support strategic initiatives such as digital transformation and business growth, we believe that it will be imperative for organizations to find solutions that combine cloud interconnected systems, real-time visibility into back-office processes and financial data, and collaborative tools that facilitate better and faster decision-making.
With the justification for accounts payable automation arguably settled, the question becomes: What is the best approach to automation for achieving optimum benefits? We’ll answer that in Part 2.
Download the Levvel Research 2019 Insight into Payables Report: Understanding the Value of Holistic Invoice to Payment Automation.