Where would any business be without its suppliers? Organisations rely on the products and services they receive from vendors, however the process of paying them has become a largely burdensome and complex task.
In fact, a study by Ardent Partners and Canon found the average cost to process a single invoice is a whopping $10.08, requiring more than 8 days of processing power! For businesses that process thousands of invoices every week, the overall cost and time delays of accounts payable can severely impact the company’s bottom line.
For accounts payable (AP) professionals, one of their most significant challenges is the time it takes to process and approve a payment. In addition, professionals say they spend more than 20% of their day simply contacting suppliers about invoices – further adding to time pressures.
In any business, there are certain approved processes for making payments. Accounts payable (AP) is the department responsible for issuing payments to vendors and suppliers. The AP department typically has a set schedule of when invoices are paid, such as once a week or twice a month. However, there are several factors that can slow down the AP payment process. For example, if an invoice is received without proper documentation, it will likely be set aside until the correct paperwork is received. In addition, invoices may be held up if there are any discrepancies, such as incorrect amounts or missing information. The AP department may also flag an invoice for further review if the payment amount is unusually high. By understanding the various factors that can slow down AP payments, businesses can take steps to ensure that their invoices are paid in a timely manner.
Coupled with issues involving misplaced or lost paper-based invoices, the delays in AP can present serious risks to a company such as:
Companies in industries such as manufacturing, construction, wholesale, distribution, and healthcare are typically most at risk – struggling with the need to pay invoices from thousands of different vendors, which come in different layouts and via different methods of delivery (72.4% of AP professionals still receive invoices in the mail and over 40% still receive some by fax!).
The impact of slow and costly AP processes is also felt by professional services businesses where the expense to process an invoice cuts into profits and diverts funds away from more valuable activities such as marketing.
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Slow AP issues generally occur because staff are impeded by labour-intensive manual tasks that are prone to human error and prevent them from having any time to work on driving the business forward.
These tasks could include:
Accounts payable automation (AP automation) is changing the way companies deal with invoice processing by solving critical problems related to speed, accuracy and control.
Goldman Sachs estimates AP automation can drive up to 80% time-savings for small and medium sized businesses. This is a huge saving for those companies that are most under financial pressure to remain competitive.
What is Accounts Payable Automation? AP automation takes the manual headache out of accounts payable by replicating the processes humans do each day and having advanced technology do them instead. The solution can be completely configured to handle a variety of workflows and rules, and is not impeded by business hours, lunch breaks, manual errors, and so on.
It can also be set up to recognise invoices from key suppliers to ensure payments are made within certain time periods to meet SLAs or receive early payment discounts (and avoid late fees).
For example, a medical and pharmaceutical company implemented automation to manage 3-way matching for their accounts payable process. Their previous process required 3 full time people to manage around 1,800 invoices a month using a variety of applications.
The AP solution now extracts data from an incoming invoice via email before validating the:
The company saw a return on investment in just 2 months, with a 90% reduction in processing time, 0% error rate, and manual effort reduced to just 10%.
Most importantly, the same staff who were once hindered by these repetitive tasks can now spend more time on imaginative and human-centric activities that add real value to the organisation.
AP automation is the future of invoice processing, and we are proud to be able to offer an automated accounts payable solution that streamlines your accounting workflows, improves efficiency, and has a guaranteed 98.5% minimum data accuracy.
Our solution removes manual tasks from the equation, while giving you greater visibility over your financial processes so you’re always in control of your spending.
There are no upfront licensing costs or need to licence, and it’s cloud-based so you can rest assured you are always working with the latest version.
For your business, this means:
To learn more about Canon Business Services' AP automation solution, contact us.
To see how much your department could save on time and money with Automated AP, take our free online calculation now.Learn more