If your company is still receiving paper invoices or paying with paper checks, you’re not capitalizing on today’s best practices! You’re also missing out on the unlimited potential for savings after relieving your AP team of time-consuming tasks such as opening the mail, data entry and filing mountains of paper.
In today’s blog, we’ll take a sneak peek at the top four benefits of AP automation.
#1 Saving Your Organization Money
Research by PayStream Advisors shows that the average cost to process a transaction is 44 percent higher when conducted manually rather than through an automated system. Companies are paying – on average – more than $22 to process and pay one invoice. However, many companies are cutting their processing costs in half by automating their accounts payable process. Late payment fees are also avoided thanks to reduced routing and approval times. The industry average for routing and approval is 28 days. With AP automation, many companies are seeing a turn-around of 2-3 days.
#2 Improving Scalability for Growth
When companies grow, their invoice volume grows too. In a manual, paper-based process, additional AP staff would be required to handle the increase in time-intensive tasks. With AP automation, these manual tasks are eliminated and the overall process is streamlined. The AP clerk is able to quickly verify invoice information is coded correctly and assigned to the right approver(s).
The system flags exceptions and routes them to an AP associate, who determines whether to call the vendor or research the issue further. And since all of the information is stored in one location, there’s a dramatic decrease in the number of inquiry calls from vendors. Essentially, automation removes the heavy lifting, so even if invoice volume skyrockets, the process for receiving, approving and paying them is reduced to three steps: code, approve, and post to the General Ledger.
#3 Decreasing your Risk of Fraud
About 48 percent of payment fraud can be tracked back to paper checks. In a survey conducted by the Association of Certified Fraud Examiners (ACFE), it was revealed that nearly 70 percent of corporate respondents reported having been victims of check fraud.
Automation enforces strict adherence to business rules, reducing opportunities to commit fraud. Manual processes rely on post payment review to detect deviations from business rules. By the time you’ve detected an issue or discovered an error, the fraud has already occurred. By automating the AP process, your company's invoice and payment information is secure in a cloud-¬based environment where every invoice you process is legitimatized before it’s in your accounting system.
#4 Reducing Manual Labor
No longer does a team member need to worry about fixing data entry errors and transpositions. AP automation reduces the frustration of manually working through exceptions and eliminates repetitive and time-consuming tasks for every member of the team.
Ah, the glorious year of 1982. The Commodore 64 8-bit computer took video games to the next level, and Time Magazine named the Personal Computer as its first Machine of the Year! In the year 2017, however, the accounts payable process has been revolutionized by AP and payment automation solutions. Our desks are uncluttered and our lives are simplified – smartphones and tablets give us the freedom to work untethered, replacing fax machines, filing cabinets, and that ancient Rolodex.
If you’re interested in learning more about the accounts payable department of the future, download our free eBook, Is Your Accounts Payable Department Stuck in 1982?