Key takeaways from Hyland’s 2018 State of Accounts Payable Report: Part 2

Hyland recently published the 2018 State of Accounts Payable Report based on a survey of 200 AP professionals. The report attempts to examine why AP organizations continue to experience challenges and processing delays, despite making significant investments in technologies like Enterprise Resource Planning (ERP) and automation.

In a previous post, I explored how the results indicate a need for greater process visibility across the procure-to-pay cycle. Organizations should prioritize that attribute when selecting AP automation vendors.

However, that’s just one part of the solution. The results of the report also indicate that a lack of process control is preventing AP organizations from achieving the operational efficiency and productivity they so desperately seek.

The struggle is real

To an outsider, AP processing sounds simple – approve the invoice, code it, cut the check, and you’re done! What’s the big deal? But the people managing invoice processing day-to-day know how quickly things can get out of control.

AP professionals are totally outnumbered! The number of employees who do not work in the department but participate in AP processes (e.g. submit purchase order requests, review and approve invoices, etc.) can range from 10 to more than 50 people, according to the survey. And the larger the organization, the more non-AP staffers the real-AP staffers have to contend with.

Here’s why that matters:

  • AP staff spend hours each week responding to inquiries and resolving issues

All those people – the invoice approvers, vendors, etc. – they all have questions. Frequently. “What is the status of my invoice?” “Why haven’t I been paid yet?” “Do you remember when I submitted that one PO request that one time?”

Forty percent of the AP professionals we surveyed say they can spend anywhere from one to eight hours per week just answering AP-related questions on behalf of others. That includes addressing vendor inquiries, following up with approvers, or looking for supporting information and documentation to finish processing an invoice.

These frequent interruptions not only distract staff from what they’re working on, but can lead to significant delays, especially if invoice processing is manually driven and if documents are still filed in hard copy. That can make finding information and responding to inquiries even more difficult.

  • Rules and policies by themselves do not guarantee control 

Manual or automated, all AP departments have established rules and policies. For example, no invoice can be approved without a matching PO number; all invoices above a certain dollar figure require additional review; vendors must be approved before a PO is created, etc.

While these rules may have been in place for years, it’s unlikely that all employees are familiar with them, especially employees who only sporadically interact with invoices. It’s also unlikely that people will follow all the rules even when they do know them.

Just as answering questions and responding to inquiries can delay processing, so can spending time reinforcing policies and correcting errors that result from process violations. According to our report, 48 percent of AP organizations spend two to four hours a week enforcing invoice processing rules. Another 41 percent spend between one and three hours correcting errors.

Compounding the problem is how organizations manage and monitor non-AP staff. Most organizations use inefficient channels to communicate with non-AP staff and keep the process moving. More than 25 percent of AP teams use inter-office mail and separate spreadsheets to manage the participation of non-AP employees. Nearly half use Email.

  • Lack of control creates delays

Lacking control across invoice processing can create seemingly small delays that add up over time. More importantly, organizations that lack control are missing opportunities to have their AP teams concentrate on more strategic work that creates value for the enterprise.

Less time responding to questions or correcting errors means more time building vendor relationships that could lead to favorable payment terms in the long run. Less time chasing down approvers means more time analyzing spending and payment trends to identify ways to improve cash flow.

The right content services platform can help AP organizations take control of their AP operations. With flexible workflows, organizations can build standard business rules into the tools that all employees interact with. Instead of hounding approvers via email or sending interoffice envelopes with invoices to review, auto notifications let non-AP employees know when they need to take action. Best of all, all the activity associated with each invoice is tracked, so there are never questions about status or modifications.

Use automation solutions to take control

Choosing an AP automation solution can be overwhelming, but our survey results conclude that organizations that prioritize visibility and control in their vendor selection will be in the best position for success.

For more details, download the full 2018 State of Accounts Payable Report.

Danielle Simer

Danielle Simer

Danielle Simer is a marketing portfolio manager at Hyland. Her mission is to share best practices and evangelize the power of enterprise content management (ECM) as a tool to automate paper-based processes and improve operations across accounting and finance, human resources, and contract management. Danielle joined Hyland after more than six years with a research and advisory firm devoted to helping senior executives manage their departments and teams more effectively. She received her bachelor’s degree from The Ohio State University and her MBA from Georgetown University’s McDonough School of Business.

1 Response

  1. Exactly, you present the exact points of struggle in accounts payable. It seems easy for others but when you are doing this it becomes quite tough when your minor mistake can change a game. Keep posting such thoughtful things.

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