The increased adoption of electronic invoicing along with solutions for front-end imaging, approval and exceptions workflow has prompted some analyst firms to predict that we are approaching the era of collaborative commerce. As a result, an increased number of suppliers will submit invoices electronically and more businesses will adopt cloud-based and mobile-enabled invoice processing solutions. How do you join the era of collaborative commerce and reap the competitive advantages of automated accounts payable (AP) invoice processing before becoming a laggard in your industry?
Successfully sell your AP automation project to the c-suite!
The best way to win the vote of the c-suite is to address their top priorities in your business case. Here are five primary benefits of automation you should highlight when addressing executive management and other key stakeholders:
- Heightened Visibility & Analytics
Accounts payable information is critical to many of the financial metrics that executives regularly track and/or report on, including: cash flow against current and future expenses, Days Payables Outstanding (DPO), percentage of invoices paid to terms, percentage of early-payment discounts captured, and AP operating costs. Automation gives you real-time access to the critical information needed to generate these reports.
- Streamlined Invoice Submission & Approval
Invoices sent via email are anticipated to surpass paper invoice volumes within two years. Ardent Partners claims 66% of businesses will have to process these invoices as paper because they lack the technology required to automatically extract header and line-item information from PDF attachments and other digital documents. Automation enables businesses to electronically process invoices received in any format (e.g., paper, email, fax, scanner, supplier portal, XML, mobile device or EDI, etc.), and best-in-class services offer mobile approvals for on-the-go managers.
- Reduced Processing Costs
Manually processing invoices results in significant operational overhead: costly and error-prone keying of invoice data, lost or misplaced invoices, long approval and exceptions cycles, compliance and security risks, high paper storage and retrieval costs, delays in posting approved invoices to an ERP, and time consuming supplier inquiries. PayStream Advisors research reveals the average cost of manually processing an invoice can be as high as $20, versus $4 for automated invoice processing. The average cost of processing an invoice in an environment with no automation or low levels of automation can be up to 20 times greater than the cost of processing in a fully automated environment. Plug those numbers into a formula with the number of invoices you’re processing per month for a quick-and-dirty ROI calculation.
- Better Spend Management
Paper-based AP processes make it difficult to access spending information. Accounts payable automation provides businesses with insight into category and supplier spending, budget variances, and maverick spending. This visibility over spending helps you better manage enterprise spending, reduce the cost of goods, ensure contract compliance, and gain a competitive advantage over peers through a stronger supply chain.
- Decreased Risk of Fraud
Paper-based AP processes do not provide: tracking of invoice history and approvals, mechanisms for ensuring that employees adhere to approval policies and separation of duties guidelines, chain of custody assurances, readily available audit information, controls for Sarbanes-Oxley and Payment Card Industry Data Security Standard (PCI DSS), or ways to prevent documents from being discarded or destroyed ahead of deadlines set by regulators or auditors. 72% of businesses surveyed by IOFM said that paper checks are the payment type most vulnerable to fraud. Automation mitigates potential fraud by restricting the ability to approve invoices and initiate payments to authorized individuals.
If your business case is still in need of some support, don’t fear! IOFM is hosting a webinar with subject matter expert Mark Brousseau, presenting a step-by-step guide to building an AP automation business case. Registration is open now, but is limited so I encourage you to save your spot quickly.