How To Make The Most of Company Money With AP Automation
Everyone’s looking for a way to save money without compromising on quality. It’s often a challenge, but in the AP Department, you can actually cut costs while also improving your process. By upgrading from a paper-based to an automated electronic invoicing system you’ll maximize savings and minimize errors at the same time.
Cut Labor Costs
APQC’s 2015 Survey on Accounts Payable Process Productivity yielded interesting results regarding AP costs. This survey of 997 organizations found that the median cost to process an invoice is $7.25. Top performers were only spending an average of $4.98 per invoice. That’s significantly less expensive than bottom performers spending $12.44 per invoice.
Why the huge gap? It depends on how much manual intervention your invoice processing requires. APQC found that labor costs typically consume 62% of total AP costs. By switching to a system that uses less paper and more automation, you’ll save money and reduce workload. That reduces labor cost per invoice and frees up employees for other tasks.
Catch Pricey Errors
The cost of labor problem doesn’t just plague paper-based AP systems. If you’re using a poor-quality electronic system, you’ll still lose time and money when employees have to step in and manually fix things like invoice errors and inaccurate purchase orders.
That’s why it’s not enough to just store records electronically. You also need a system that accurately captures data and processes it electronically. Using business process management software in the AP department allows for automatic fact-checking, faster processing, and accurate payments.
Reduced labor costs and fewer errors mean automated systems have a large impact on AP department savings. They also save money in others ways as well. For example, faster processing means you can get invoices submitted on time and avoid late fees. You might even qualify for early payment discounts.
As your AP system becomes increasingly digital, you also save money on business supplies. You don’t spend as much money on paper since processing happens mostly or exclusively electronically. You save money on postage since you can submit payments to many suppliers with electronic money transfers. And you save on storage since a good automated AP system stores all records electronically.
Ready to experience quality AP automation in your company? Check out NextProcess’ AP Automation Software. Our software reduces invoice processing costs, gives you increased control and insight, and scales to your company’s specific needs. Check our product page for more information, or contact us to set-up a demonstration and see first-hand how simple invoice processing should be.