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" they found that they see using AP Automation software as one of the top benefits to their organization and 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 concluded.
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: the average AP Automation solution cuts that number down to 10 days.
- Companies using a state-of-the-art AP Automation platform bring the 10 days 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. Needless to say, the time to process an invoice is time any business should still be making money.
"Straight-Through Processing" Turns the AP Workflow into an F1 Race
"Straight-through processing" can be considered the Formula 1 of AP Automation, needing little to no human intervention in any step of the process. Basically, none unless it's 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 cloud-based intelligent software, like Yooz, gets to work behind the scenes. The software 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. Note: this is the ultimate time-saving shortcut for responding to exceptions and audits.
Lap 2: 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 the software lives in the cloud and runs on mobile devices too, any authorized user can review and authorize payments or access information from anywhere at any time. 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. After all, 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, decrease your time to process an invoice, and start saving.