David Johnson, AP solutions manager, Perceptive Software
In a day and age where the corporate mantra includes: “do more with less,” “work smarter not harder,” or “Kaisen,” we still see many organizations processing accounts payable invoices the old-fashioned way. That is, many organizations still receive a majority of their invoices via paper, route them through the organization through intercompany mail--or just walking them from desk to desk, move invoices from pile to pile (waiting to be matched, matched/waiting to be entered, entered/waiting to be paid, paid/waiting to be filed, filed/hopefully to be found again).
Perhaps it’s time to say, put your money where your mouth is. Better yet, put more money on your bottom line by investing in an enterprise content management system that will make your AP processing significantly more efficient.
The Institute of Financial Operations recently conducted a survey regarding the automation of accounts payable with the results issued at their annual Fusion Conference in Orlando, Florida. According to their study, more than 75% of the respondents indicated that they receive a majority of their invoices via paper. Of those responding, 39% stated that their paper invoice volume exceeded 90% of their total volume.
When looking at the paper invoice volume, 32% indicated that their volume over the past year has not changed. When combining the following categories over the past year: slightly lower, unchanged, and slightly higher, the results showed that over 80% of paper invoice volume has essentially remained static. There appears to be no end in sight of paper invoices for these organizations.
There is a cost associated with the manual payment process too. According to this same study, 41% of respondents indicated their processing cost per invoice was $5.00 or less while 59% reported a per invoice cost in excess of $5.00. These processing costs savings do not include the potential for early payment discounts offered by vendors.
I attended Disney’s Accounts Payable Department presentation at Fusion on their world-class accounts payable processing. They reported a per invoice cost of $1.61 per invoice with the aid of automation. It’s worth noting that Disney processes in excess of 5 million invoices annually. Thus, a mere change in cost per invoice of $0.01 will affect their bottom line by $50,000.
So c’mon, do more with less and work smarter not harder, let automation bring bottom line results to your organization. Your competitors are.
What do you think? Post your comments below.