How Effective Is AP Automation?
Automation is a hot topic in Accounts Payable today, but is it really as good as it sounds? Turns out, top researchers are finding that accounts payable automation does save a significant amount of time and money. Automating the AP department is a major move your company can make to speed up financial close, cut costs per invoice, increase productivity, and reduce AP errors.
Speed Financial Close
A survey by Ventana Research shows that companies who rely on automation in their AP departments close their quarterly books more quickly than companies with little or no automation. 71% of organizations that are nearly or fully automated close in 6 days or fewer. Only 43% of companies with partial automation and less than 25% of companies with no automation do this.
This is a significant difference. Timing is critical in financial and accounting departments. The faster you can close the faster you’ll get numbers to executives and managers. This makes it possible for the company to react more quickly to opportunities and deal with issues before they become larger problems.
Cut Cost Per Invoice
Each invoice your organization processes costs a certain amount of money. Figures from the IOMA (Institute of Management & Administration) show that the average cost to process an invoice and accompanying purchase order is $11.62 with low levels of automation. Implementing high levels of automation in the department cuts that number by 40%, down to a $6.99 average per invoice.
With NextProcess software, electronic invoice intake happens rapidly via XML, EDI, email, or direct upload from vendors. Any paper invoices can be scanned and processed quickly. The software is designed to handle multiple types of invoices, including POs, non PO, statements, ERS, check request, recurring and more. Approval rules in the system are flexible to fit your business’ exact needs, and the system will automatically alert accounts payable to deal with any exceptions as they arise.
More AP automation means higher productivity and fewer errors. When companies implement high levels of automation, the number of invoices processed per AP staff member per month can double or even triple. And since there are no individual user licenses with NextProcess, you never have to compromise about who on your team has access to the software. Everyone can take advantage of the increased productivity afforded by AP automation.
Automation also decreases the error rate in an AP department. With invoices, payments, and expense reports processed automatically according to pre-programed rules, the software catches many errors before they happen.
Ready to see positive change in your AP department? Contact NextProcess today to learn more about how our automation software can help you.