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Is Accounts Payable Automation a Good Investment?
The accounts payable department is responsible for managing a company’s payments. It’s uniquely positioned to help manage cash flow and support responsible financial management. Naturally, you want the method for managing accounts payable to support good financial decisions.
Deciding whether to invest in updated accounts payable (AP) processing might not be an easy decision. You need to weigh the pros and cons. Often, you’ll also need to overcome some myths about AP automation if you want to update your accounting department.
If you (or higher-ups in the company) think Accounts Payable automation is simply an expensive or time-consuming fad, then the AP department might still be plowing its way through mountains of paperwork. Alternatively, if your company went digital with AP early on, you might now be using a software program that’s clunky and outdated. If you’re expecting modern AP automation to just be more of the same, then it doesn’t seem like updating would be a good investment.
The truth is modern cloud-based AP software is more than just a trendy tech fad. It is a good investment that saves money and time. Once the AP process is moving along smoothly, you’ll also have fewer headaches worrying about accounting errors and future audits.
Automating AP Saves Money
Reduce Per-invoice Cost
In a report from May 2012, the Aberdeen Group indicated that organizations can save upwards of $40,000 for every 10,000 invoices by streamlining their AP process. The most efficient systems cost about $2 to pay each bill. In contrast, most companies paid well over $6.
It’s been over 10 years since that report, yet there are still many companies that don’t take advantage of the streamlining, cost-saving benefits of AP automation. Here at NextProcess, we find that fully automated accounts payable processing saves an average of $14.93 per invoice compared to companies that manually process their invoices.
Avoid Penalties
One of the advantages of automatically processing incoming invoices and outgoing payments is that you don’t have to worry about invoices getting lost or buried in piles of paperwork. The system automatically keeps track of all the invoices, as well as their payment deadlines.
With AP automation, you’ll save money by cutting down on late-payment penalties. In some cases, your company can also save money by taking advantage of early payment discounts. The AP and procurement departments can work together to negotiate discounts with suppliers.
Investing in Automation Saves Time
Reduce Workload
When you choose NextProcess AP software, you’ll drastically reduce the amount of time spent on invoices. Our high-volume mail center quickly gets your paper invoices digitized, and the AP software automatically handles multiple kinds of electronic invoice submissions. No more worrying about filing paper invoices or sorting out different types of electronic invoices.
With NextProcess, you can auto-process up to 90% of your invoices. With fewer invoices requiring direct attention, employees have an easier workload and are free to focus on more value-added tasks than routine invoice processing.
Speed Up Processing
AP automation software cuts down on the number of “touchpoints” each invoice passes through. The invoices move through the system quickly and efficiently, and you can choose to code certain types of invoices for automatic electronic approval. For invoices that require human approval, you can program the system to send multiple approval reminders or escalation emails if the invoices aren’t approved in a timely fashion.
NextProcess automation reduces the average cycle time to just 5.4 days. For invoices linked to purchase orders that are already in the system, the software can typically process them within 12 hours. That’s much faster than older software systems or paper-based processes.
Using AP Automation Reduces Mistakes
Reduce Errors
Human error is inevitable with manual processes, whether it’s paper-based or using digital files like spreadsheets. In contrast, NextProcess’s proprietary data capture technology ensures over 99% accuracy on every invoice.
With automation, you’re not only saving time by not having to manually enter invoice data, but an automatic AP process also cuts down on errors and delays. No more time-consuming invoice entry, no more avoidable errors. Automation also puts your company in a better position for catching or preventing fraud.
Improve Visibility
AP automation makes it easy to centralize your accounts payable data. All your employees who are involved in the AP process will use the same software platform, which updates in real-time. This dramatically improves visibility.
The same features that improve visibility also help your company tighten internal controls. You can customize NextProcess software to automatically enforce your company’s best-practices policies. You’ll have a much easier time tracking key performance indicators (KPI) and evaluating your company’s AP process.
Implementing Easy-to-Use Software Improves Work
Better User-Friendliness
Paper-based processes and outdated software systems are notoriously difficult to use. That can lead to headaches for your AP staff. Also, training new employees in those processes is hard, and if an employee you relied on for years leaves without training their replacement it can be nearly impossible to figure out how to use an outdated system.
Automating with user-friendly software makes work much easier for existing employees. It also makes it easier to train new hires. Improving your processes to make things easier for your employees may even contribute to efforts to reduce employee turnover.
Streamline Data Management
There’s no good reason to spend extra time and money filing paper copies of invoices and payments. NextProcess’s software system automatically tracks documents, processing history, and other important data. A centralized document repository makes it simple to access every invoice and its processing history.
The database is easy to search, and you can download the data with just a few clicks once you’ve found what you’re looking for. This simplifies record keeping and is invaluable for creating reliable, complete audit trails.
Experience NextProcess Today
If you’ve been on the fence about implementing AP automation, you can rest assured knowing it’s a good investment for your company. Most companies that implement AP automation quickly see a return on their investment in terms of saved money, saved time, reduced errors, and an easier-to-use AP system. Contact us today to set up a free demo and see first-hand how accounts payable automation can improve your company’s AP process.
