Accounts payable automation has become one of the lowest risk, easy to implement solutions for companies looking to embrace process automation as a way to boost efficiency and lower costs. Well established statistics based on the collective experiences of companies of all sizes and across industries support the fact that there is a clear ROI for AP invoice automation that can be achieved in as little as six months. So why have some companies charged ahead, while others remain stuck with manual processes and artificially inflated overhead for such straight-forward tasks?
A recent industry survey suggests that the c-suite and AP process owners don’t see eye to eye when it comes to the value of automating the back office. Among the AP professionals surveyed, 93% identified flaws in existing AP processes as a major obstacle to lowering costs and ensuring scalability. Yet, only half of the executives surveyed were aware of any process issues, assuming that AP inefficiency was an acceptable cost of doing business.
While AP professionals are often aware of the benefits of AP automation, many times those benefits don’t translate into the priorities and perceptions of executives. This represents a significant missed opportunity that can be solved through better communication and a re-imaging of accounts payable as more than just a cost center.
For example, rather than focusing on the time required to process an invoice and promoting the ability to shorten payment cycle times, AP process owners and managers should look at the positive impact this has on things like cash management. For example, by digitizing and automating invoices, companies can achieve better visibility to G/L accruals and achieve a better understanding of their cash flow at any given point in time. This allows firms to make informed decisions about when to pay vendors—and when it makes sense to take advantage of early pay discounts to further reduce costs.
Yes, efficiency and cost savings matter. But ask any company executive and she will probably tell you that finding opportunities to grow revenues and expand operations are always more motivating and compelling arguments. Any investment in technology that improves visibility to critical financial KPIs, or that can ensure that company is able to continue to scale as business grows will have higher priority and secure executive sponsors.
From that perspective, AP automation is a perfect use case for digital transformation, providing fast ROI for initiatives that can introduce systems and technologies that turn transactions into business intelligence in a way that can be repeated for other processes and other departments.
For example, many companies that automate AP processes are able to leverage the same intelligent data capture systems used to digitize invoices to do the same for customer orders. AP vendor invoice automation can drive enough efficient and cost savings to prove out the model and pay for the technology within a year. Applying the same approach to customer orders can reduce days sales outstanding, boost customer fulfillment and satisfaction while also delivering more timely access to buyer behavior and sales trends.
All of a sudden, the AP team isn’t just engaged in paying bills faster in a way that is easier for their staff—they are contributing to greater efficiency, process transparency and financial wellness thoughout the organization.
What better way to gain buy-in from executives than to get them to think differently about how their AP team can help achieve bigger, more ambitious company goals.