Tag Archives: improve ap

If it feels like your accounts payable team never has enough time in the day, you are not alone. One-in-five accounts payable teams are working longer hours these days, according to an online survey conducted by the Institute of Finance and Management (IOFM). Incredibly, eight percent of accounts payable practitioners are working an additional two … Read More

7 Ways AP Automation Improves Operational Efficiency

by October 21, 2020Insightsefficiency, improve ap, operational efficiencyColleen Crist

October 21, 2020Insightsefficiency, improve ap, operational efficiencyColleen Crist

As the economic downturn continues, businesses are looking for ways to reduce costs. One way to reduce costs is to improve process efficiency. When it comes to accounts payable processing, most organizations have a lot of work to do to improve efficiency. 33% of accounts payable professionals are working longer hours these days, according to … Read More

Why Automation is the Linchpin to AP Process Improvement

November 11, 2020Insightsap automation, improve ap, payment automationColleen Crist

If it feels like your accounts payable team never has enough time in the day, you are not alone.

One-in-five accounts payable teams are working longer hours these days, according to an online survey conducted by the Institute of Finance and Management (IOFM). Incredibly, eight percent of accounts payable practitioners are working an additional two hours per day. And many accounts payable teams would be working longer hours if their employer had not put a lid on overtime.

Adapting manual, outdated processes to a remote working environment has been hard on accounts payable teams. The operational disruption caused by the sudden shift to Work from Home has resulted in new fraud risks, slower invoice approval cycles, more phone calls and e-mails from suppliers regarding the status of invoices, and more time spent chasing down information.

And the workarounds that many accounts payable departments have implemented during the shift to Work from Home – notably, using e-mail to approve invoices – really are not working.

Before the shift to remote working, accounts payable already was bogged down with manual tasks:

Collecting supplier banking account details and tax documents
Opening the mail
Manually retrieving invoices from an e-mail box
Logging into a supplier portal
Keying invoice data and correcting inevitable errors
Matching invoices to purchase orders (POs) and shipping receipts
Determining invoice approvers and forwarding invoices
Chasing down information to resolve invoice exceptions
Uploading approved invoice information into a downstream system
Reconciling invoices and payments

All the while, accounts payable staff must keep track of dozens of business rules, best practices, regulations, and auditor guidelines for how they should approve invoices and pay their suppliers.

With businesses leaning heavily on their accounts payable departments to provide better visibility into cash and corporate spending, and accounts payable departments being asked to do more with less, accounts payable leaders must find ways to free their staff to focus on higher-value activities such as data analysis, supplier management, stakeholder collaboration, and vender master cleanup.

Why automate accounts payable

Now is the time for accounts payable departments to standardize their processes. From invoice receipt and data capture to approval routing and payment processing, accounts payable departments with more consistent processes operate far more efficiently and with fewer errors than their peers. In these departments, staff are taught the best practices for performing each function, and they do it that way consistently. Moreover, staff continuously search for ways to improve their performance.

The thing is that half of all departments have not begun their process improvement effort, according to IOFM’s report, Building an Action Plan: Key Takeaways from Top Performing AP Teams.

Payables departments have no time to waste in standardizing their processes. And there is no better way to standardize accounts payable processes than with an automated solution. The combination of automation with standardized processes delivers the improvements businesses desperately need now:

58% improvement in cost-per-invoice
19% improvement in invoice paid-on-time rates
19% improvement in first-pass match rate
58% improvement in transactions requiring correction

These statistics from IOFM show why automation is critical to process improvement. Automation delivers the consistent processes that departments need to achieve optimal performance.

Access and responsibilities can be configured by role or user
All invoices are aggregated onto a single platform for standardized processing
Intelligent data capture and validation improves data quality
Automation enforces adherence to processes (workflow rules, segregation of duties, etc.)
Invoices can be prioritized for processing based on pre-configured business rules
Only administrators can determine process changes in an automated system
Automated retention ensures that images and data are not discarded prematurely
Complete audit logging ensures operator accountability
Key Performance Indicators (KPI) make it easy to track operator performance
Real-time visibility into invoice workflows help managers identify bottlenecks

What is more, leading accounts payable solutions integrate with downstream systems, such as an enterprise resource planning (ERP) or accounting platform. This facilitates the fast, seamless flow of information and eliminates the possibility of mis-keyed data, data latency, or misrouted information.

Achieving better operational performance is top-of-mind in times like these.

Automated accounts payable solutions provide the consistent processes that departments need to improve the metrics that matter – cost, on-time payments, straight-through posting, and accuracy.

If your accounts payable department wants to improve its operational performance, Paymerang wants to speak with you.

Email us now.

7 Ways AP Automation Improves Operational Efficiency

October 21, 2020Insightsefficiency, improve ap, operational efficiencyColleen Crist

As the economic downturn continues, businesses are looking for ways to reduce costs.

One way to reduce costs is to improve process efficiency.

When it comes to accounts payable processing, most organizations have a lot of work to do to improve efficiency. 33% of accounts payable professionals are working longer hours these days, according to the Institute of Finance and Management (IOFM). Incredibly, eight percent of accounts payable professionals are working an additional two hours per day. And many accounts payable professionals would be working even longer hours if their employer had not put a stop to overtime to reduce costs.

Making matters worse, much of this time is spent on low-value activities such as check printing.

Accounts payable leaders are eager for ways to improve operational efficiency and effectiveness. 27% of payables leaders surveyed by IOFM say that ensuring productivity is their biggest challenge in the new reality. 24% of accounts payable leaders admit that it is a struggle to get suppliers paid on time.

The new reality has impacted efficiency across the accounts-payable lifecycle, including:

Invoice receipt
Invoice data capture
Approval workflows
Exceptions resolution

One way to improve efficiency is pay suppliers electronically, instead of with a paper check.

Here are 7 ways that electronic payments can wring inefficiencies from your payables processes:

Less complexity: a single payment file upload initiates payment to all suppliers; instructions are parsed, and payments are remitted in all payment methods, including paper check, virtual card, or ACH. This eliminates the need to log in to multiple banking systems, and the cost of paper, postage, printing, and mailing paper checks.

Streamlined reconciliation: integrating an electronic payments solution with the general ledger in your ERP platform provides real-time payment reconciliation that eliminates the need for the costly manual keying of data or the decoding of banking messages.

Fewer errors: uploading a single payment file eliminates costly error-prone manual processes. Payment information also can be pushed automatically from your ERP platform. And many electronic payment solutions provide tools for identifying duplicate payments. Without automation, staff can waste hours uncovering and resolving one payment error.

Easy integration: electronic payments can be seamlessly integrated with any ERP without requiring material changes to existing accounts payable workflow processes. Approved transactions are uploaded downstream, eliminating duplicate entry of invoice information, and enabling automatic updates of invoice and payment information to the ERP application.

Better cash management: electronic payments provide greater control over the timing of payments to suppliers. This opens the door to more early-payment discount opportunities. 80% of businesses receive invoices that offer early-payment discounts, per IOFM. Businesses that take advantage of just a discount term of 1/10 net 30 earn an annualized 18% return—a lot more than they can earn from a typical interest-bearing bank account.

Fewer supplier inquiries: with electronic payments, suppliers have 24/7 access to the status of their payments, as well as their payment history. This visibility helps suppliers better manage their cash without the need to call or e-mail overburdened frontline payables staff. IOFM estimates that it costs $3.60 on average to respond to a single supplier inquiry.

More time for higher-value activities: few things waste as much staff time as printing, signing, stuffing, mailing, and reconciling check payments to suppliers. 84% percent of the typical accounts payable practitioner’s day is spent on manual tasks, IOFM reports. In fact, accounts payable department managers spend more time on transaction processing than on the managerial tasks they were hired for, IOFM finds. Paying suppliers electronically frees staff from the drudgery of manual check processing, allowing them to focus more of their time on higher-value activities such as data analysis and supplier management.

Eliminating inefficiencies in the accounts-payable lifecycle also benefits employees. Paying suppliers electronically creates a modern process that allows staff to focus on fulfilling tasks.

Want to improve the efficiency of your accounts payable processes, even as staff work from home?

If so, we want to speak with you.