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The Role Accounts Payable Plays in Identifying Growth and Savings Opportunities
Increasingly, accounts payable (AP) is seen as a department capable of driving strategic growth and cost savings. Historically considered a back-office function, AP is moving to center stage in finance.
As accounts payable grows, Business Process Automation (BPA) software provides a foundation for crafting a sustainable AP process that supports company-wide goals. When AP operates efficiently and provides real-time cash flow data, your financial team can leverage it to support operational decision-making and identify growth and savings opportunities.
AP Can Be Strategic, but Is It?
In March 2024, the firm Insight Avenue conducted interviews with hundreds of finance leaders. 80% of these leaders believe Accounts Payable plays a vital role in identifying business opportunities In fact, they think AP can, and should, lead the company’s efforts to grow and save money.
At the same time, 79% of those same finance leaders think that AP’s reliance on manual processes leads to inefficiencies. When AP isn’t making good use of modern digitization and automation technology, it means that finance isn’t keeping pace with the rest of the company. It can also put the company behind competitors that are faster to digitize.
Like many traditional back-office functions, AP is increasingly recognized as a department that can play a key strategic role in companies. It’s hard to realize AP’s full strategic potential, though, if it’s struggling with inefficient workflows and a lack of transparency.
Enabling Positive Change with AP Automation
AP is most useful for identifying growth and savings opportunities if it’s operating efficiently and it provides access to real-time data on cash flow. It’s hard to achieve either of those goals with a manual, paper-based process or outdated digitization technology. The answer is to update AP processes with modern BPA technology.
BPA, particularly the Software-as-a-Service (SaaS) model, is easy to implement within your company. It’s also user-friendly and easy to learn. Plus, you can customize good quality SaaS systems to your company’s exact needs and integrate them with existing ERPs.
Lower costs, faster processing, and improved data insight are just a few of the reasons to automate your AP processes. You can craft an airtight case for AP automation by highlighting the benefits of AP automation and the ROI.
Ways That AP Automation Saves Money
Here at NextProcess, we typically see our clients break even in 9-12 months and enjoy additional cost reductions over time. The cost savings come from several features of AP automation software:
- Auto-processing up to 90% of invoices means employees spend less time on them, lowering labor costs (and freeing employees up to focus on more productive work than data entry or matching invoices with POs).
- Faster processing and automated deadline tracking mean no more late fees.
- Accurate data entry and automated error checking minimize costly errors.
- Digitizing office processes reduces money spent on supplies like paper, printer ink, and file folders.
- No individual software licenses (i.e. you can give as many people access to the software platform as you want) save money for larger teams.
How much AP automation actually costs depends on several factors, many of them specific to your company. It also depends on the pricing model that your software supplier uses. Here at NextProcess, our pricing model is based on the software used and expected transactional volume. In other words, your cost is based on the number of documents you process each month.
Using AP To Identify Opportunities
So how does automating AP help your company identify growth and savings opportunities? We’ve seen how you can save money with AP automation software, but there’s more to the story. The software tools make it possible to identify cost-saving opportunities that go beyond simply processing invoices more efficiently. In turn, identifying these opportunities helps your company grow in a sustainable way.
Capturing real-time data is one of the biggest advantages of AP automation software. With cloud-based SaaS systems, cash flow data is available 24/7. The system updates in real time, so you always have access to the most up-to-date and accurate data available. This gives your company a distinct advantage in operational decision-making. You always know exactly where your money is and where it’s going.
With BPA software, you’ll also have the data needed to understand financial performance quickly. It speeds up month-end close as well as processing times for individual invoices. Faster access to financial data makes it easier for the financial department to make growth-related decisions. How much inventory to buy, whether to switch vendors, and when to make purchases and payments are all examples of key decisions that can be informed by AP data.
The NextProcess Difference
There are so many different AP automation systems out there now that it can be hard to pick which one will be best for your business. If you’re looking for a whole-business financial solution that will help your company grow, save money, and build a sustainable process, NextProcess stands out. We offer a true end-to-end solution from budgeting to purchasing to payment.
NextProcess offers the only suite of software with modules to power and simplify your capital project management, procurement & purchase orders, accounts payable, travel & expense, and payment disbursements. Our software also integrates seamlessly with ERPs including SAP, Oracle, MS Dynamics, QuickBooks, and many more. After initial integration, there’s no support needed from your IT team. We handle all the software updates to keep your BPA system working smoothly.
You don’t just have to take our word for it, though. Contact us, and we’ll set up a free demo so you can see our software in action. You can get a first-hand look at exactly how our flexible, customizable SaaS solution can help your company optimize accounts payable.
