The Accounts Payable department is often one of the most ‘paper rich’ in any organisation and is often the single largest cost in the accounting function. This is due to many Accounts Payable departments being highly manual rather than automated.
In a recent webinar co-hosted by Ardent Partners, What Really Makes Accounts Payable Best in Class?, they surveyed nearly 200 people who work in the Accounts Payable, Finance or Procurement department to ask what challenges they are facing and what changes they plan to make in the future to improve efficiency in the departments. It was revealed that 43% of survey respondents said that their department is still highly manual and paper-driven and 36% said that lengthy invoice and payment processing time is still one of the main challenges. These statistics reveal that departments such as Accounts Payable are still spending most of their time manually processing invoices. When you consider the type of technology that is accessible today, such as invoice management software solutions, it is crazy to think that the majority of invoices are still handled as paper.
One of the many problems that Accounts Payable face is that a typical purchase to pay process involves a host of key documents, such as purchase orders, invoices, receipts and so on, many of which need to be authorised or approved by individuals across an organisation. This is a lengthy process that it very time consuming, very expensive to operate and prone to error. The need to improve process efficiency is one of the top business drivers of 2012 according to Ardent Partners, with 52% of survey respondents saying this something they want to improve within the next year(s).
So how can the Accounts Payable department improve process efficiency and cut down costs? Investing in an invoice processing or an invoice management solution, such as Documation’s Invoice Management Solution, can help to automate and streamline the Accounts Payable department. The benefits of using an Invoice Processing Solution include:
- Reduced data entry costs: an invoice management solution will significantly reduce manual data entry and its associated labour costs.
- Cut the cost of invoice approval and authorisation: an invoice management solution will automate the process of authorising invoices for payment and can save up to 50% of the costs involved.
- Manual error is removed: an invoice management solution will reduce many manual tasks which will significantly reduce manual errors when processing documents.
- Lower storage costs: filing space can be reduced as the cost of electronic storage has been reducing year on year as the technology develops.
- Increased security: Access can be granted on different levels so only people with the right level of security can gain access.
- Improve supplier relations: when suppliers contact the AP department with queries, the invoice and all accompanying details can be instantly retrieved and the query answered, saving time and removing the cost of calling them back.
- Reduced accounts payable (AP) headcount: automating invoice processing leads to a more efficient AP department and can reduce staff volumes significantly.
With benefits such as these, AP staff could focus more on value-added work such as negotiating discounts with suppliers, rather than manually entering data or trying to find a misplaced invoice.
The Accounts Payable department is imperative to any business and investing in an invoice management or invoice processing systems will not only improve the AP department but the business as a whole. Improvements will include saving money and time, as well as being able to build and maintain effective relationships with suppliers. So if you haven’t thought about automating your Accounts Payable department yet, then consider what the above benefits could do for you and your business now and in the future.