What drives organizations to automate accounts payable (AP) processes? More organizations are learning traditional paper-based processes don’t make the cut anymore. This is largely based on the fact that paper and manual tasks are labor intensive and expensive. Documents are often delayed, lost or misplaced. Plus, organizations must pay employees to complete the same, repetitive, yet vital processes day in and day out.
According to KnowledgeLake’s latest White Paper, paper-based processes create inefficiencies and frequently result in:
- Significant amounts of time and money wasted on manual processes, such as filing, retrieving, copying and mailing paper documents.
- Fraud, late payments, double payments, missed payments and process errors due to a lack of defined, tracked Accounts Payable processes.
- Incorrect information and hidden costs associated with storing and manually processing all types of paper invoices.
- Inability for CFO’s and controllers to leverage real-time metrics to better understand outstanding liabilities and optimize cash flow planning
Employees spend 20% to 40% of their time searching for documents manually. (Source: Coopers and Lybrand)
Unfortunately, a majority of AP departments are still manually processing paper-based invoices.
Companies starting to craft a digital strategy are looking to business process optimization. They are realizing that with the right AP automation solution in place, organizations save now and in the future because a robust accounts payable automation solution can meet and/or exceed the needs of business for many years to come.
When you automate accounts payable, your organization realizes many benefits. This translates to:
1.) Deepening visibility of cash flow – Automation provides higher visibility into an organization’s cash flow. Drive more strategic procurement into invoice status and payment timing to better manage working capital and take advantage of early payment discounts.
2.) Enhancing risk management – Reduce or eliminate the costs associated with process errors that include: manual keying mistakes, late payments, double payments, and lost or incorrect payments.
3.) Meeting regulatory requirements for tracking and accessibility – With tight document control capabilities and more complete audit trails, financial departments can enhance compliance with organizational or governmental regulations and agencies.
4.) Reducing physical storage & paper filing costs – Minimize direct and hidden costs associated with managing, finding and storing invoices, packing slips, receipts, POs and other documents by substituting filing cabinets for an electronic repository.
5.) Eliciting trust with suppliers – Feedback to the vendor at appropriate phases in the AP process is a critical aspect to providing a positive vendor experience. Identifying issues as these arise early, reducing inquiries from vendors and eliminating late payments will improve the overall quality of supplier relationships.
6.) Increasing employee and customer satisfaction – Cutting the number of time-consuming, boring and repetitive tasks can lead to productivity and efficiency gains, as staff can shift their focus from low impact activities to more strategic, fulfilling projects. Immediate access to AP information can improve internal responsiveness and satisfaction when answering internal AP inquiries.
7.) Spending less time on manual processing – Significant time is saved when employees do not have to print paper invoices and mail them to their customers or spend time searching through an endless number of filing cabinets. Eliminating manual processes will free up time for employees to focus on more value-added activities.
8.) Achieving corporate, green initiatives – Reduce the environmentally harmful processes associated with the manufacturing and maintenance of paper documents. Automation encourages an environmentally conscious work place, as it is a major contribution toward your company’s green initiatives.
The average cost of processing invoices with low automation can be as much as 20 times greater than with high automation – Institute of Finance & Management
Organizations that automate accounts payable not only save time and money, but this automation allows for the AP function to become more strategic as opposed to the traditional back office tactical function, in turn moving your business forward.
Ready to automate your AP processes, but not sure where to start?
As a result of working closely with our clients to identify and heal key pain points in the Accounts Payable process, we created a Microsoft SharePoint solution to automate accounts payable that delivers true value from the purchase to payment process.
KnowledgeLake’s Accounts Payable solution is a robust platform that facilitates paper and electronic data capture, workflow automation, search and retrieval, ERP integration, and real-time analytics. Powered by Microsoft SharePoint, the framework accelerates deployment time, enabling organizations to quickly reduce processing costs, improve operational productivity and achieve rapid ROI.