2016 Invoice Workflow Automation Report: Why AP orgs aren’t automating
Accounts payable (AP) departments using invoice workflow automation (IWA) software experience fewer invoice approval delays and spend less time resolving AP process issues than departments using manual invoice management processes, according to a new report from PayStream Advisors.
Yet, despite these benefits, 30 percent of organizations are still not using IWA solutions or have no plans to implement them.
The benefits of invoice automation
Most AP organizations rely too much on their own efforts to eliminate paper and improve invoice management processes, according to the report. Using data capture tools to scan paper invoices or email to route invoices for approval has helped some organizations, but without complete IWA, these organizations miss out on the additional benefits of integration with their ERPs and the ability to handle more complex approval workflows that ensure accuracy and completeness of work.
With IWA, your AP department takes advantage of OCR scanning and electronic invoicing that eliminates all manual data entry by the buyer. You automate time-consuming activities like matching and routing, approvals, payment and reconciliation. You also can take advantage of robust reporting and analytics that greatly improve your organizations ability to audit, analyze, and improve processes.
What’s holding AP departments back?
PayStream finds that most organizations cite budget concerns as their primary barrier to adoption. Lack of technical resources to manage the automation tool as well as lack of executive sponsorship also play a significant role.
Surprisingly, nearly a quarter of organizations say they aren’t moving to full AP automation because their “current processes work.”
But are they really working? Two-thirds of companies spend between one and 8 hours per week resolving AP invoice management issues. That lost time could cost anywhere from $1,350 to $10,800 annually per employee, according to PayStream’s calculations.
The business case for holistic AP automation
Invoice workflow automation does more than reduce processing delays, remove non-value-added tasks and speed invoice approvals. Organizations using IWA software experience:
- Increased employee productivity
- Lower processing costs
- Better visibility over liabilities
- Easier compliance with regulatory requirements (SOX, FASB)
- Fewer late payment penalties and interest
In addition to survey data from a variety of industries, the 2016 Invoice Workflow Automation Report discusses the key features and functionalities of IWA software in-depth. It’s a helpful starting point for organizations looking to improve their current invoice management processes.