Making a Winning Business Case for AP Automation
How to Make a Winning Business Case for AP Automation
There are still an astounding number of organizations that process invoices manually. It may be easy to overlook the value of automation or overestimate the time commitment and change management required to transform AP processes. Let’s take a look at some best practices for how to make a winning business case for AP Automation.
Base Business Case for AP Automation: Save 50% or more on Data Entry and Manual Approvals
AP Automation eliminates time-consuming tasks associated with processing both PO- and Non-PO-based invoices. Invoices from any delivery channel and format are received, digitized, normalized, and stored in a single platform. Intelligent data capture technology automatically extracts header, supplier, and line-item data from invoices that are received either electronically or on paper. Invoices can also be easily matched with receipts.
Once digitized, invoices that need review are electronically routed to the correct person, saving time and eliminating the possibility of getting lost in the shuffle of paper or individual emails. The efficiencies unlocked through digitization means reducing processing times, paying more invoices on time, eliminating late-payment penalties, reducing supplier inquiries regarding invoice status, and strengthening vendor relationships. Additionally, best-in-class organizations gain leverage when negotiating and capturing early-payment discounts.
Finance-Approved: Evaluate and Take Advantage of Payment Terms
According to the IOFM 2016 AP Key Performance Indicators Study, most accounts payable departments capture less than 21 percent of all of the early-payment discount offers, and 12 percent are unable to capture any early-payment discounts. Higher levels of automation allow companies to process invoices in less than half the time. Once an invoice has been approved for payment, the buyer presents the supplier with early payment options via email or an online portal.
HR-Approved: Give People Time to Focus on Their Jobs
Automation boosts productivity (and helps with retention) by getting rid of the data entry, matching, paper handling, and routing that is required with manual processes. The technology automatically extracts and validates invoice data, matches invoices with POs and proof-of-delivery receipts, and posts approved invoices directly into the ERP platform. Invoices that need review or approval are electronically routed to specific individuals based on pre-configured rules. Dashboards alert managers and users of bottlenecks and invoices that are coming up on their due date.
IT-Approved: Connect with Your ERP
One of the biggest pain points for many accounts payable departments is matching and coding invoices into the Financial System. Automation offers the ability to automatically match and code accounting information such as General Ledger, Vendor, Department, and more. The technology also checks for errors like duplicate invoices, eliminates data entry errors, and alerts you of outliers. All of this is tightly integrated with your financial system to load master data into your AP automation solution and send accurate, approved bills for payment back.
The business case for AP Automation is intriguing and backed by research and facts. Despite this, many accounts payable departments still have trouble building the business case for automation. There are many benefits to transitioning from manual AP processes to automated, streamlined workflows; focusing on the points above will help prove that to senior management.
Beyond AP Automation: How AI and analytics unleash the power of finance data
Interested in learning more about AP Automation? Watch our webinar on the future of accounts payable automation, the roles that artificial intelligence and analytics play in the evolution of these technologies, and the attainable ROI that comes from investing in powerful automation practices.