Every business is looking for ways to eliminate unnecessary costs. Yet most businesses are letting money go down the drain by relying on manual or semi-automated AP processing.
It costs 39 percent of businesses more than $6 to process a single invoice, the Institute of Finance and Management (IOFM) reports. But those costs are just the tip of the iceberg for most AP departments.
Processing invoices in a manual or semi-automated environment results in costly and error-prone keying of invoice information, lost or misplaced invoices, long approval and exception resolution cycles (which result in late-payment penalties and missed early-payment discounts), compliance and security risks, high paper storage and retrieval costs, delays uploading data on approved invoices to downstream systems, and time-consuming supplier inquiries regarding invoice and payment status.
In a manual or semi-automated AP environment, staff also must collect and manually reconcile purchase order, invoice and payment data to balance the books and prevent duplicate payments.
Full AP automation has a big impact on the cost of processing invoices.
Full AP automation delivers an average reduction in invoice processing costs of 29.2 percent, the Association for Information and Image Management (AIIM) reports. A 29 percent reduction in average invoice processing costs translates into savings of about $300,000 per year for a business that processes 10,000 invoices per month at an average cost of $10 per invoice. But nearly one-third of the businesses reduce their invoice processing cost by 50 percent or more by fully automating AP. In this case, a business that receives 10,000 invoices per month would save a stout $600,000 a year.
How are these cost savings possible?
Full AP automation enables businesses to electronically process invoices received in any format (paper, e-mail, fax, scanner, supplier portal, XML, mobile, or EDI), at any location. Invoice data is digitized and automatically extracted, validated, matched against a purchase order (if one exists), routed for approval, and stored. This eliminates the costs of handling, routing, storing and retrieving paper documents, and keying invoice data. Nearly all invoice data can be extracted automatically without human operator intervention. Robust workflow options allow for several levels of approval, complex coding, and allocations across departments. Consolidating all invoice data in a single system eliminates the expense of managing content across a variety of databases, systems and physical storage locations. What’s more, on-the-go staff can approve invoices using a mobile device.
Want to stop flushing money down the drain because of expensive manual or semi-automated AP processes? Download our free white paper, “Stop Throwing Money Down the Drain: 5 Reasons to Embrace Full AP Automation.”