The old saying that “time is money” couldn’t be truer when you look at automated invoice processing time. Faster approval cycles mean the difference between doing your job or winning the race: better visibility into cash management, more early-pay discounts and rebates, and happier suppliers since they don’t have to wait for their invoices to be paid weeks later. The way to speed things up in the AP department and quite literally make money by paying bills is AP Automation. When advisory firm Levvel Research polled finance and AP leaders for their 2020 "Payable Insights Report" what they see as top benefits to their organization in using AP Automation software, almost two-thirds mentioned “quick approval of invoices,” even ahead of improving employee productivity. “Cloud-based tools are dynamic, affordable, and flexible, offering technology that enables business agility,” the report concludes.
Cutting AP and Invoice Processing Time from 45 to 3 Days
The agility gap between a paper-based and a digitally streamlined AP workflow is quite remarkable.
- An organization with low or no automation can take up to 45 days to process an invoice, while the average AP Automation solution cuts that number down to 10 days.
- Companies using a state-of-the-art AP Automation platform, like Yooz, bring it down to a mere 3.1 days, according to the most recent ePayables report by Ardent Partners.
"With invoice processing costs that are 80% lower, and invoice processing times that are 74% faster than their peers, Best-in-Class businesses have made incredible strides where it counts the most," say the Ardent researchers. "Through the introduction of automation, efficiencies, and more strategic thinking, top-performing AP groups shine."
But the name of the game is time AND money. Automate in the cloud and your increased processing speed pays off as the cost to handle an invoice drops from almost $16 to $2.56. The savings accrue across the board, from the facilities and staff needed to process paper invoices to shipping, storage and time lost to manually entering data, correcting mistakes, ferreting out duplicates and chasing the right colleagues to approve invoices and payments in a timely fashion.
"Straight-Through Processing" Turns the AP Workflow into an F1 Race
"Straight-through processing" can be considered the formula 1 of AP Automation, with little to no human intervention unless it's absolutely necessary. You can think of it as an invoice racing through the system in record time with a few pit stops as possible.
Lap 1: Vendors submit electronic invoices at a special portal, where intelligent software, like Yooz, gets to work behind the scenes. It uses artificial intelligence and machine learning algorithms to read and understand invoices, filing every document securely in the cloud and even making it searchable down to each single word. (The ultimate time-saving shortcut for responding to exceptions and audits.)
That means lap 2 is already here, beating records when it comes to assigning the correct GL codes, matching an invoice to an existing purchase order and immediately routing it for approval. Since Yooz lives in the cloud and runs on mobile devices too, any authorized user can review and authorize payments from anywhere. In fact, being this fast means that a company can lock in 75% of early payment discounts, which makes automation almost instantly pay for itself.
Why ruin accounts payable processing time by cutting checks?
And with that, we're already roaring into lap 3 quickly approaching the finish line. If you don't touch envelopes stuffed with invoices, why should you slow down to cut and mail checks? ePayments have several advantages when it comes to saving time and money.
Here's how Ardent puts it after surveying the crop of best-in-class companies that have fully automated their AP workflow: "ePayments ... can eliminate the deficiencies associated with paper-based checks, while also enabling greater payment agility, speeding up payment times, lowering costs, improving compliance, mitigating fraud, and providing superior visibility into organizational cash flow".
So start your engines and start saving.