Accounts payable departments have their work cut out. Top-level management expects AP to work seamlessly, but while technology investment is seen as important for businesses, too often AP software does not get the consideration it should. AP managers, therefore, need a clear reckoning of the value of software to their department and to be able to show the precision it can bring. The cost savings alone should be enough to drive such considerations up the agenda.
The Value Of Accuracy
The labour of invoice processing is not new. It is renowned for being cumbersome and error prone. This predicament has only been exacerbated by recent trends in remote working, which can make data sources more diverse and consistency harder to ensure. That means AP ought to be a key area for investment in software solutions.
Inaccurate invoice processing can result in late payments, duplicate or reissued invoices and long hours for staff trying to resolve problems. With manual processing, errors are inevitable and desk-based decision-making on invoice verification may not conform to consistent standards. By contrast, automated invoice processing is much faster and more consistent.
There is a spectrum of automation adoption, from none to full end-to-end. End-to-end means the use of automation for at least three of the key invoice processing stages: receipt, data input, approval, PO matching and payment. However, only 20% of companies have hit full process maturity that aligns with end-to-end automation. But there’s no doubt that full automation is worth aiming for. Research shows that end-to-end solutions can achieve a 93% accuracy rate.
Time And Cost Savings
Such accuracy brings significant savings for AP processes. Time spent in communication with suppliers over unpaid, missing, or duplicate invoices is significantly reduced. Invoices can be paid early, which often brings discounts and at the very least avoids late payment fines. Or if preferred payments can be timed exactly to maximise working capital on your balance sheet. These time and cost savings have knock-on effects on other departments and can help to improve the standing of AP in the business as a whole.
Improvements in AP precision don’t just have relationship benefits within the business, they also help communications and reputation with suppliers, clients and business partners. A relationship of trust means that suppliers, for example, will likely offer more favourable rates in future. Timely invoice processing is a key motivator here. It also helps trust more generally, which can only benefit a company’s reputation.
Next Steps: Discover How Precision Can Boost Your AP Department
The precision and efficiency brought by automation software can cut processing costs and demonstrate the value of investing in accounts payable. To see how automation can improve accuracy in your department, contact us or book a live demo today.
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