IFO AP Efficiency Study

Less Paper, More Complexity: Focusing on Process, Not Paper is Key to Productivity, According to IFO

A recent survey conducted by the Institute of Financial Operations validates and quantifies the trends that we have witnessed first-hand at Artsyl Technologies, working with companies focused on automating and streamlining their AP processes. As the IFO’s survey results suggest, even as paper invoices are being reduced (down from half of all invoices to a projection of 30% in 2017), AP processes are growing more complex—and that trend is projected to continue even as paper declines.

The reason for the increased complexity is that while paper processing is going down, a more diverse set of invoice formats creates its own challenges. In fact, according to the survey, receiving invoices from multiple channels are the biggest contributors to AP processing complexity.

How are organizations dealing with the fact that invoices come to them from all directions, in an increasing-variety of communications and formats?

Multi-Channel Invoices: Transforming a Problem into an Opportunity

According to the IFO, document imaging and electronic payments are the top improvement strategies used by survey respondents. No surprise there, either. In fact, our clients come to Artsyl to help transform ALL of their AP- or other process-related documents into structured data that can inform a rules-driven process and also provide real time visibility to key performance indicators for ongoing process improvement.

Faster AP Processing = More Timely Data and Better KPIs

Speaking of which… the demand for real-time visibility (analytics) into the AP department’s financial information has increased over the past two years for most IFO survey respondents. And that makes sense, too. Relying on smart process platforms that can intelligently capture data from documents delivers instant efficiency gains and a quick return on investment. But the REAL strategic value that document imaging and digital processes delivers is great process control and visibility.

Smarter, Faster, Cheaper: For AP Automation, Three is a Charm

If you’re focused on benchmarking your own AP processes and want to learn how to measure your current performance and set goals for process improvement, here are some additional relevant findings from IFO and their community of AP professionals:

• It takes most AP departments more than three days to process a paper invoice, and some AP departments take as long as 25 days to process an invoice.
• It costs most AP departments more than $3 to process a paper invoice, while some AP departments report that it costs them more than $15 to process a paper invoice.
• The majority of AP departments are centralized.
• Nearly one-third of AP departments are operating as part of a shared services center or have plans to operate as part of a shared services center.
• Invoice processing cycle times and costs are the top areas AP departments want to improve
• Document imaging and automated workflows for invoice approval are the top automation priorities of AP departments for the next 12 months.