In Part 1 of this blog series, based on the current Yooz France campaign, we reminded you that AP automation benefits everyone from AP staff to CFOs, all who will be freed to make more strategic decisions and do more value-added work.
We started by answering the question, “Why Change?” arguing that the benefits of automating invoice processing are simply too compelling to pass up. Next,
Part 2: Why Now? Here’s a hint: You can’t afford to wait.
Mark Brousseau, Institute of Finance Management (IOFM) AP automation subject matter expert, speaker, and consultant tells us that today’s companies are expecting more from the AP function, realizing that the data housed in AP automation platforms can be accessed and used to make smarter, more informed decisions.
In a recent podcast he talks about the future of AP automation: “It will be unrecognizable! Digital, data driven, and strategic. Stakeholders will unlock the value of AP automation and leverage it in more ways than ever. Instead of continuing to ask, ‘How do we manage this ever-growing pile of invoices?’ CFOs will instead ask, ‘Where do we stand with working capital so we can more accurately forecast cash, manage budgets, and mitigate risk?’ All helping drive larger corporate objectives.”
One of the most compelling opening remarks in the Levvel Research 2019 Payables Insight Report lies in the report’s executive summary, which is an indication of the direction that AP automation is going:
“One of the most effective ways to improve an organization’s bottom line is to decrease the cost of operations that do not directly contribute to profit, redirecting the freed resources towards strategic, profit-generating initiatives. Automating accounts payable (AP) processes is a perfect example of this opportunity, as it not only reduces the footprint of a high-cost administrative department, but it also creates an opportunity to generate revenue through increased efficiency.”
This restates the idea we at Yooz have been introducing into the AP automation market since almost the beginning of our business: Essentially that you can turn the AP department into a profit center and directly impact the bottom line. And human resources can become more strategic, shifting from a “data-entry” role to more strategic responsibilities, like negotiating early payment discount thanks to the shortened cycle time.
Speaking of Profits
AP departments cannot afford to wait any longer to implement an advanced AP automation solution. Let’s put some specific numbers to it. Highly automated AP departments:
- Pay more than 90 percent of supplier invoices on time.
- Capture 97 percent of discounts offered in exchange for early payment.
- Process nearly 23,000 invoices annually per FTE—14 times as many invoices per full-time employee (FTE) each month as peers with little or no automation.
- Spend only $1.77 to process a single invoice in comparison to more than $15 per invoice on average with manual processing.
- Match 90 percent of invoices and POs on the first pass.
- Need only correct one percent of all supplier invoices processed when duplicate payments and other errors are reduced by validating data early in the process.
Without automation, it is unlikely that accounts payable will ever break free of the perception that their department is merely a tactical back-office function, and AP leaders will not have the opportunity to prove their strategic and value-added worth to the entire enterprise.
Now that we’ve addressed “Why Change?” and “Why Now?” we’ll answer “Why Yooz?” in Part 3 of this blog series.
*This blog series is based on the Yooz whitepaper, Why Finance Leaders Shouldn’t Wait for Electronic Invoicing, available for download, with research data from the Institute of Finance Management’s (IOFM) Is Your AP Performance Top Tier? Report.