Whether it’s for efficiency, sustainability, or cost, businesses are trying to eliminate paper from their processes as much as possible.
This is especially true for accounts payable (AP), where gluts of paper invoices and manual processes lead to inefficiencies, late payments, and lost discount capture. When companies make the move to automate, the reasons often correlate to the amount of invoices processed per month as well as total revenues.
1. Cost Cutting
Companies are always looking for ways to control the size of their workforce through increased productivity. Adopting AP automation allows them to do just that. Most experts agree that one employee can manually process approximately 1,000 invoices per month. When they automate payables, that number can be increased to 4,000-5,000 invoices per processor per month, and up to 8,000 with PO-based matching. In addition, for large enterprises, the largest ROI may result from discount capture through streamlined processes and pay cycles. If a large company’s invoices amount to $1M/month and they realize simply a 1% savings in spend, that is significant.
Automating enables AP to manage by exception, and provide the information and insights to procurement and treasury to prove the strategic value of AP.
2. Company Expansion
Growing revenue is one of your company’s top priorities. When back-office support costs grow faster than profits, companies look to maximize their existing staff as the business grows instead of making new hires. With this, they need to eliminate manually intensive, document-centric processes and move to an automated environment.
By adopting an AP automation solution, companies see immediate benefits:
- Paperless invoicing from day 1.
- End-to-end invoice processing benefits, from invoice receipt to payment.
- Dashboards & reporting give full visibility into every invoice in your system.
- AP can now be the enabling force for improved cash flow management.
And, when the solution is SaaS-based (software-as-a-service), companies get a solution with:
- Minimal IT involvement
- No capital expenditures
- Subscription-based fees that include quarterly product updates and enhancements
- Full visibility into invoice tracking and history
3. CHAOS
Your AP department is flooded with paper invoices! Invoices are misplaced or lost! Some invoices aren’t paid on time and others are paid twice! HELP!
These are the things that can and often do happen that lead businesses to look at an AP automation solution. This is especially true for smaller companies that simply don’t have the budget to increase staff, take on significant hardware and software expenditures, fix an otherwise broken process. With automation, chaos is eliminated, order is restored, workflows are streamlined, and invoices are paid on time.
The AP automation market has grown year after year, and is expected to grow more than 12% in 2013*(source: Paystream Advisors). Improved workflow, e-invoicing, and imaging are the top 3 financial goals for companies of all sizes* (see figure below). Whether you’re in complete chaos, cost-cutting, or expansion mode, SMBs to the large enterprise are turning to accounts payable automation more now than ever before.
Top Financial Automation Goals
(Source: Paystream Advisors, Invoice and Workflow Automation Adoption – Benchmarking 2012)