Why Automation is the Linchpin to AP Process Improvement

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Adapting manual, outdated processes to a remote working environment has been hard on accounts payable teams.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.

Colleen Crist

Colleen Crist

Colleen leads our national portfolio of channel partners and owns new business development and channel strategies. She is focusing on accelerating partner growth and expanding our footprint nationwide by developing new partnership initiatives. Her strategy and execution expertise spans all aspects of business development, product development, launch, marketing, sales and partner development. She leads our partnership team that drives end-to-end execution of corporate partner programs and is responsible for identifying, forging, scaling and sustaining our partnership strategy. Colleen is currently earning her Executive Master of Business Administration degree from Virginia Commonwealth University’s School of Business.