Most AP departments handle most of the invoices they receive from suppliers.
That’s according to the Institute of Finance and Management (IOFM).
While it’s no surprise that invoices sent through the United States Postal System would require lots of human operator intervention, the growth of invoices sent via email hasn’t made things much better.
Eighty-four percent of the typical AP practitioner’s day is wasted keying data, pushing paper and emails, fixing errors and mistakes, chasing down information, and responding to supplier inquiries.
Resolving a single exception can result in days of back-and-forth emails and phone calls.
And things only get worse as a business grows or expands its operations globally.
All that manual handling is despite 77 percent of AP departments having at least some type of automation – typically not an end-to-end invoice-to-pay solution, but some type of automation.
That doesn’t mean that AP departments cannot achieve touch-free processing. Robotic process automation (RPA) and other advanced technologies, combined with third-party subject matter experts, are making it possible for an AP department’s operators to only intervene when necessary.
Benefits of touch-free invoice processing
Touch-free invoice processing delivers tremendous benefits to AP departments of all sizes.
1. Reduced costs. Labor represents most of the cost of AP, studies show. By eliminating or offloading manual tasks, AP departments can reduce the cost of invoice processing by 50 percent or more – money that can be reinvested into growth-generating activities.
2. Increased staff productivity. Highly automated AP departments process eight times as many invoices per full-time equivalent as their peers with little or no automation, IOFM finds. Freed from manual activities, AP staff have more time for higher-value activities such as analyzing data, collaborating with stakeholders, and building relationships with suppliers.
3. Faster cycle times. Nothing slows invoice approvals down as much as manual processes. Each time a person must handle an invoice, it creates friction and the opportunity for potential delays. For instance, think about all the time lost to invoices that are misrouted to the wrong person or become stuck on the desk or in the email box of someone who is out of the office. An invoice can sit on someone’s desk for weeks until the decision-maker returns.
4. Fewer errors. Errors and mistakes are inevitable wherever there are manual processes. Even seasoned employees can allow things to slip through the cracks. A single typo can create downstream issues that result in delays or erroneous or duplicate payments.
5. Greater scalability. Attracting and retaining employees is harder these days. Manual processes expose and exacerbate the challenge. AP departments must hire, vet, and train additional staff as their invoice volume grows, making it hard to support business growth.
These are some of the benefits that touch-free invoice processing can deliver.
How to achieve touch-free invoice processing
Whether your AP department is automating for the first time, or planning to refresh its existing AP automation, here are some proven strategies for achieving touch-free invoice processing.
- Set retrievals on autopilot. AP professionals spend a surprising amount of time collecting invoices from email boxes, FTP landing sites, and supplier portals. RPA software can do this thankless task for you, saving time and reducing the possibility of invoices being overlooked.
- Quit keying. Keying the header and line-item data from invoices takes lots of time – to say nothing of the hours wasted fixing inevitable typos. Best-in-class AP automation solutions automate the capture of invoice data with a guaranteed level of accuracy. Data results that don’t meet pre-set confidence levels are reviewed by human operators employed by the solution provider. And extracted data is matched against information residing in your ERP.
- Offload exceptions resolution. Resolving invoice exceptions is notoriously labor-intensive. Relieve your AP staff of that burden by choosing an AP automation solution provider that uses subject matter experts to try and resolve exceptions on your behalf. With the right AP automation partner, your staff will only need to handle invoice exceptions when necessary.
- Post invoices directly to your ERP. AP teams waste lots of time manually uploading approved invoice files to their ERP or accounting software, or worse, manually keying the data into an ERP. Find an AP automation solution that seamlessly uploads invoice information into your ERP or accounting software, without your staff needing to lift a finger.
- Strive for end-to-end capabilities. It’s easy for an AP department to become mired in manual processes when it relies on a la carte automation solutions that only handle a small part of the invoice-to-pay process. Look for a solution that provides frictionless processing from invoice receipt through payment settlement and seamlessly integrates with the ERP.
- Kiss your spreadsheets goodbye. If your staff maintains spreadsheets to reconcile invoices for the financial close, automation can help. Advanced AP automation solutions reconcile invoices and payments automatically, and in real-time without any manual intervention.
From keying to spreadsheet reconciliation, manual invoice processes can bog AP down.
The right technology, combined with third-party human assistance, can help AP departments eliminate manual processes and achieve touch-free processing across the invoice-to-pay lifecycle.
Is your AP department wasting too much time on manual repetitive tasks?
Contact us to see how the IPS AP Automation Solution can help!