Getting things done sounds easier than it is when it comes to handling invoices. Forget about video calls, collaboration platforms and email. Many accounts payable teams are still stuck in the paper age. Staff has to deal with reams of paper trickling in from vendors and suppliers. They spend hours opening envelopes, manually entering data, scanning documents and sending invoices, purchase orders and even checks around to other departments to review and approve, before finally filing them. Sadly, the stapler is still a staple of the profession.
On the upside, there’s a lot of room to improve accounts payable efficiency if a company chooses to switch to a cloud-based solution that automates the AP workflow end-to-end. When the market researchers at Ardent Partners polled finance professionals for their 16th annual “State of ePayables Report,” they found ongoing concerns that AP processes take too long, cost too much and are simply not efficient enough.
Here are the top five challenges facing accounts payable teams in 2021, ranked in the order of importance:
Invoice/payment approvals take too long
A high percentage of exceptions
Too much paper
Manual B2B payments
Late supplier payments
Cost and Time -- The 80:80 Rule Of Accounts Payable Efficiency
An efficient AP workflow can tackle all of those challenges and unlock almost immediate benefits. Cutting back on paper documents unburdens your team from manual entry and simultaneously cuts back on errors. When a smart platform such as Yooz automatically captures all invoices, correctly GL codes them and performs a three-way match, the number of exceptions drops, duplicates and outright fraudulent submissions are flagged. Overall processing cost and cycle time go down by 80 percent. That’s an impressive accomplishment made possible by digital transformation.
Companies that streamline their entire approach to how they handle the accounts payable process gain more than operational efficiency, though. They turn their AP department from a cost center into a source of profit. That’s because AP automation lets them save money on every invoice by pushing it through their system faster, optimizing cash flow, locking in early payment discounts and avoiding late fees.
The end result, as tallied by Ardent, speaks for itself. The average cost of processing an invoice with a cutting-edge platform drops from 0.95 to .25, and processing time shrinks from 11.9 to just 3.3 days.
Accounts Payable Efficiency Turns Searching into Finding
What’s more, a cloud-based platform gives everyone involved better visibility. They know exactly where an invoice or payment is and are able to pull up an individual document months or years later with a keyword search instead of digging around file storage boxes. Companies that embark on digital transformation, in short, go from searching for files to simply finding them in their browser.
Improved accounts payable efficiency also leads to better relationships with vendors. They no longer have to call and speak to an AP expert about their outstanding invoice. Instead, they get instant answers and become partners in a live business network that revolves around shared real-time information. Experts call it “financial intelligence,” and it benefits everyone involved, replacing inquiries with conversations.
No wonder that a growing number of companies are embracing more efficient tools for AP automation, albeit at varying levels of deployment. According to Ardent,
78% of organizations currently use document imaging and scanning
71% have automated routing and approval workflow
59% use an electronic invoicing solution
51% have an electronic B2B payments solution
44% feature a complete procure-to-pay solution and
36% have a self-service supplier portal.
An End-To-End Solution is Key for Accounts Payable Efficiency
It’s encouraging to see that both the technology adoption rate and the willingness to deploy those solutions in the near future have gone up significantly in 2020. But the good news comes with a caveat. Companies that follow a piecemeal approach instead of going for an intelligent, end-to-end solution such as Yooz risk leaving money on the table. That’s particularly relevant when global events throw you a curveball.
Automating the entire journey of an invoice from purchase to payment was key to how companies were able to withstand the massive shock of the pandemic. With offices shuttered, reduced staffing and people working from home, it made all the difference whether the AP team could keep the business going remotely.
A complete solution such as Yooz lets them do exactly that, capturing incoming invoices instantly and automatically routing them to the correct recipients who can then review and approve them from any device, anywhere. Initiating electronic payments and feeding that information back into their financial software or ERP system closes the loop for maximum efficiency.
Work Remotely and Generate High ROI with Intelligent AP Automation
Covid-19 disrupted many business operations and strained supply lines, but the AP workflow withstood the tough test of 2020 and kept cash flowing, says Yooz COO and CIO Laurent Charpentier COO: “With our advanced P2P automation solution, we enable finance professionals to save time and reallocate resources for more value-added tasks, thereby letting them generate a high ROI.”
As companies return to a new normal, they will increasingly embrace change and aim for more accounts payable efficiency because their bottom line depends on it. New technologies and digital tools will allow finance leaders to better handle costs, better handle supplier relationships, which is important in tough times, better adapt to changing regulations and embrace a new remote or hybrid working model.
It’s a promising trend that a global survey backs up. In its first “State of Automation in Finance” report, Yooz polled businesses in eight countries around the world how they’ve been affected and responded to the pandemic shock of 2020. Three-quarters told us that Covid-19 accelerated their digital transformation efforts of accounts payable processes, and one in five said they’ve adopted fully automated invoice processing.
Maximum Accounts Payable Efficiency Creates Maximum Happiness
And that’s true for organizations of any size, not just the big players. One in three US businesses, after all, process only between 251 and 750 invoices a month, but they spend more than one full working day managing those vendor invoices. With a cloud-based subscription model like Yooz, small and medium businesses, too, have access to the latest innovations to boost their efficiency. They can tap into artificial intelligence, deep learning and robotic process automation to capture and understand every incoming document, creating straight-through processing with little to no human intervention. That kind of efficiency right out of the box makes both vendors and AP teams happy.
Stay tuned to read more about the detailed findings from our global “State of Automation in Finance” report in the coming weeks.