By Autson autson.com

Welcome to Accounts Payable Automation

Accounts Payable Automation - is it right for you?

Accounts Payable Automation (APA) is a much talked about subject on the lips of all managers with financial accountability because it’s often recognised as a quick-win for those looking to reduce their processing expenses and eliminate data entry inaccuracy.

So what are the main benefits of accounts payable automation and how do you know when it’s right for your organisation?

We’re dedicated in assisting organisations to become efficiency leaders and as such this is one of many questions we aim to shed light on.

Many consider accounts payable automation as an important leap towards being more efficient, as the procure-to-pay cycle is often far more complex and painful than it appears on the surface.  A necessary evil, the accounts payable process is more often than not, top of the list when it comes to human touch points and exposure for business processes.  Due to the high number of staff and suppliers involved, the process is difficult to manage and often results in poor visibility of the entire process.  Some of the key frustrations effecting many organisations are:

  • Manual data entry is time consuming and prone to high error rates;
  • Manual processing of documents will not efficiently scale with growth, meaning additional headcount is the only option;
  • Continued management of paper trail results in increased cost of managing archival storage;
  • Inefficiency of retrieving files from archive inhibits customer / supplier satisfaction;
  • No visibility of invoice images against their financial transactions;
  • Continual administration and managerial burden for review / approval of invoices;
  • Continual training gap between the knowledge transfer of staff;
  • Lost documents;
  • Limited tracking and visibility of invoices though the invoice life cycle often results in limited ability to accurately forecast cash flow
  • Risk of fraud, non-compliance and lack of business continuity


When we understand the frustrations of most financial managers in relation to the AP process, we can begin to appreciate the benefits of Accounts Payable Automation and automated Business Process Management (BPM).  Evidence suggests that the core solution to accounts payable automation lies in optimising workflow processes to improve overall speed, efficiency, control and visibility of operations.  Optimisation is a function of finely choreographed automation and best practice workflows expertly applied to a set of processes. Automation effectively meets the AP challenges of cash management, lack of transparency, process inefficiencies, delayed closing times, poor productivity and threats to compliance posed by fraud and errors.  The initial appetiser is realising the potential to reduce processing costs and data entry inaccuracies by 80% or more!  This often results in significant hard cost savings with the reduction in processing staff required and allows for a solid foundation for growth, without the requirement of increasing headcount.  When automated intelligent data capture is combined with meaningful business logic and electronic business process management, a world of benefits reveals itself that far outweigh the initial financial Return on Investment (ROI) including:

  • Provide a highly efficient & accurate data capture process;
  • Facilitate automated enforcement of policies and procedures via workflows that incorporate best practice policies;
  • Allow staff to concentrate on exceptions, high value invoices and the management of the processes;
  • Increase customer service levels, both internally and with external vendors;
  • Automation of tedious, time consuming tasks;
  • Increase employee productivity and self-worth to the organisation;
  • Leverage an enterprise platform to support future business document scanning requirements in other business units;
  • Leverage from existing investment in IT infrastructure and business systems;
  • Provide a platform for future initiatives;
  • Reduction in lost documents;
  • Ability to process more with less;
  • Reduce threats to compliance posed by fraud and errors


Whilst it may be difficult to argue the benefits of accounts payable automation, how do you know when it’s right for your organisation?  Are their minimum invoice volumes that you need to be processing? Do you need to have a certain number of clerical staff?  How do you know if your AP problem is big enough to see an effective ROI?
 

Due to the nature of accounts payable processing, inevitably processes vary from one organisation to the next and all organisations believe their process is the most challenging to overcome!  The reality is, if you can apply human logic to process an invoice; an efficient accounts payable automation and business process management provider will be able to personalise an electronic capture and workflow solution to incorporate your human logic and add many enhanced data validation features.  The solution provider should also be able to assist you to determine whether the ROI is going to be economically viable for your organisation.  Whilst the complexity of the process, the number of reviewers and approvers involved in the process and the manual distribution of invoices should be a high consideration when evaluating whether AP Automation is right for you, typically organisations need to be processing 2,000 invoices per month to realise a solid return on investment.

  • Stay informed by subscribing to our site and we’ll keep you posted on the upcoming topics:
  • How important is front end capture and business logic compared to workflow?
  • Automatic Document Classification – Know what you’re processing and who it’s for!
  • Intelligent Automatic Separation of Documents – How to eliminate costly pre-scanning preparation!
  • What’s involved in a typical Accounts Payable Automation project and what’s the first step?
  • Is it necessary to raise system based Purchase Orders (PO) to benefit from AP Automation?
  • How important is automatic line item extraction and what’s involved?
  • Is it possible to automatically match extracted invoice line items to PO details?
  • How can you link an electronic copy of the captured invoice to the financial transaction in your ERP?
  • How will your Accounts Payable Process benefit from incorporating an intelligent Business Activity Monitor (BAM)?

 

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