Could You Save 80% of Your AP Costs?

The American Productivity & Quality Center found that best-in-class companies report an average cost per invoice of $2.07 while other companies report an average cost per invoice of $10 or more. That means that leading AP departments enjoy 80% lower costs than other companies.

What are they doing that makes such a dramatic difference in their cost per AP invoice? What we want to show you in this blog post is how best-in-class companies are leading the way with AP process automation.  We will outline where companies typically experience choke points in their workflows and the best way to address those problems with low-code process automation. 

Does Any of This Sound Familiar?

In a survey of company controllers, the Institute of Finance & Management recently reported that accounts payable topped their list of financial department functions burdened by manual processes – more than accounts receivable, payroll, or even auditing and taxes.

Manual processes are frustrating in and of themselves; however, they also lead to a chain reaction of other AP missteps including higher per invoice costs, errors and inaccuracies, lost invoices, poor process visibility and missed payment discounts.

Here are just a few of the most common problems leading CFOs cite with manual AP processes:

• Incomplete or inaccurate data
• Poorly organized information and lost documents
• Difficult to find information
• Missed payment discount deadlines due to inefficient approvals
• Poor integration of systems leads to more manual work and data entry
• Decision makers lack data about each invoice and about the entire AP process

Many companies are frustrated with the lack of control and inefficiency of their current AP workflows but they don’t know where to start. Have no fear, we’re going to break it down for you step by step. First, let’s review a few of the most important benefits best-in-class companies are enjoying from AP process automation.

Results of an Improved AP Workflow

In case you need any more convincing that you should explore AP process automation, take a look at these typical results.

• Decrease in costs per AP invoice from $10 to about $2
• Improvement of AP invoice cycle time from an average of 16.6 days down to 3.6 days
• Automation of up to 90%  your most frustrating and repetitive tasks for greater accuracy and employee satisfaction
• Various studies have repeatedly shown that companies with automation are able to process 400% to 1,000% more invoices per employee than companies without automation

AP Process Automation: The Details

To better understand why best-in-class companies enjoy a $2 per invoice cost structure instead of the average $10 per invoice cost structure, let’s carefully examine how business process automation works in accounts payable.

The Invoice Arrives

What are the main differences in receiving invoices?

• Best-in-class: AP clerk receives the invoice electronically, through email or scans a physical document.
• Average: AP clerk handles the invoice manually, sorting through stacks of paper to organize various vendors.

Reading the Invoice 

• Best-in-class: Thanks to smart OCR, information is coded, classified and ready for ERP integration with very little handling effort. In fact, self-learning OCR software actually learns from previous invoices resulting in a 90% reduction of manual processes associated with new invoices.
• Average:  Busy AP clerks read and manually enter invoice information into ERP and other systems. This is an unnecessary use of time and results in manual data entry errors.

 Compare Invoice Against Purchase Order 

• Best-in-class: Paperwise automates purchase order matching with tight ERP integrations and thanks to highly accurate OCR, the system can match the PO up to 90% of the time.
• Average: An AP clerk must manually look up the PO in the ERP system and compare the invoice taking minutes per invoice.

File the Invoice 

• Best-in-class: Filing of invoices is 100% automated and paperless through Paperwise and accessible from anywhere at anytime. No more paper, no more waiting for interoffice envelopes and no more lost documents.
• Average: Employees must scan, attach or file physical copies of the invoice for future reference, approvals and disputes. Invoices and documents get lost in stacks on managers’ desks. Approval times are dramatically increased as managers and other approvers must wait for necessary information.

Send To First-Level Approver 

• Best-in-class: Workflow is automatically initiated in Paperwise and ready inside of an easy-to-use approver inbox.
• Average: Goes into an interoffice envelope and sits on a desk for hours or even days.

Corporate Governance and Approval Limits

• Best-in-class: Your company’s rules for corporate governance and approvals are automatically applied to determine which approver should review based on invoice amount, departments, roles, vendor categories and more.
• Average: Invoice might be routed and re-routed several times before it lands on the right person’s desk who has authority to approve.

Escalate Necessary Approvals 

• Best-in-class: Rules automatically re-route invoices; however, if there is a question or exception, invoices can be rerouted with a single click.
• Average: Invoice gets sent to yet another cluttered desk.

Payment Approvals

• Best-in-class: Paperwise integrates to your ERP and GL for controller’s payment queue or other payment approval process.
• Average: After many delays in the process, the invoice is entered into the ERP and could still suffer more errors from manual entry.

You Can Do This, Too

Are you ready to save 80% of your AP invoice costs? We are confident you can achieve the same results in your company that leading companies are achieving thanks to Paperwise low-code process automation.

Please contact us today to schedule your private consultation to see how AP process automation could save you 80% of your AP invoice costs.