In Part 1 of this series, we imagined a world where buyers and sellers do business electronically, without paper invoices, counted all of the pain points that manual invoice processing causes, and wondered why U.S. companies have been slow to adopt electronic invoicing?
In Part 2 , we explored some of the reasons why the reluctance to get rid of manual, paper-laden workflows in favor of automation.
Now, let’s talk about how AP leaders can optimize their operations while electronic invoicing achieves broader adoption. Here’s a hint: You can’t afford to wait.
The benefits of full accounts payable automation
AP departments cannot afford to wait for electronic invoicing to take hold because the benefits of automating invoice processing are simply too compelling to pass up. We’ve all heard about the benefits by now, but let’s put the numbers to them:
Highly automated departments pay more than 90 percent of supplier invoices on time.
Automation eliminates many of the time-consuming tasks associated with processing invoices.
Highly automated departments capture 97 percent of early payment discounts offered.
Eighty percent of the businesses surveyed for IOFM’s AP Department Benchmarking & Analysis report receiving invoices that offer discounts on the invoice due amount in exchange for early payment.
Highly automated departments process nearly 23,000 invoices annually per FTE.
Highly automated accounts payable departments process 14 times as many invoices per full-time employee (FTE) each month as their peers with little or no automation.
Highly automated departments spend only $1.77 to process a single invoice.
Automation eliminates the manual processes that drive up the cost of accounts payable processing (sometimes more than $15 per invoice), including keying invoice data, physically routing invoices for approval, filing invoices, and more.
Highly automated departments match 90 percent of invoices and POs on the first pass.
Automation does the work of matching invoices with purchase orders, saving time
Highly automated departments need only correct one percent of all supplier invoices processed.
Automation reduces duplicate payments and other errors by validating data early in the process.
These benchmarks from the Institute of Finance Management’s (IOFM) Is Your AP Performance Top Tier? report provides a glimpse into what AP teams can expect to achieve by fully automating their operations.
Without automation, it is unlikely that accounts payable will ever break free of the perception that their department is merely a tactical back-office function, and AP leaders will not have the opportunity to prove their strategic and value-added worth to the entire enterprise.
In Part 4 we’ll conclude this series by revealing the top reason why AP departments are making big strides towards full automation, despite the sluggish adoption of electronic invoicing. Spoiler alert: Look to the Cloud.
*This blog series is based on the Yooz whitepaper Why Finance Leaders Shouldn’t Wait for Electronic Invoicing, available for download.