The Impact of AP (Accounts Payable) Efficiency on Your Bottom Line
A recent report from the research and analysis organization Aberdeen Group, states, €the impact of an efficient and streamlined AP is permeated through the organization and has a direct impact on the organization's bottom line.'
Yet, the report points to many business's Accounts Payable as the poor relation lurking in the shadows when it comes to apportion of the internal investment pot, which - in view of the above claim - seems not only illogical but very short-sighted on the part of the pot holders.
The Aberdeen Group report From the Shadows to the Forefront: AP Automation and the Strategic Vision cites problems associated with processing paper documents as the number one €market pressure' on AP departments, specifying the difficulty of €finding' documents as a major issue.
The advantages of removing the physical presence of paper from processing - whether by scanning and using OCR (optical character recognition) to extract key data or incorporating electronic documents in the process (e-invoicing, e-forms, for example) - is only the start. Workflow can further enhance the department's streamlining and efficiency, as well freeing staff to concentrate on more strategic tasks.
The benefits of removing paper from business processes are well documented. In fact, they're so well-documented there's sometimes risk of them becoming a mantra-type recitation and of losing sight of exactly the extent of the advantages of eliminating paper from processing.
Whereas a paper document can only be in one place at one time electronic documents, while held centrally, are available to everyone with appropriate level of authorisation, 24/7, regardless of office location, building, town, or even country.
There are no more lost documents and gone are those over-burdening storage requirements - all those dusty filing cabinets languishing in the walkways of wasted space.
One hundred financial services executives were surveyed for the Aberdeen Group's report. On the heels of the 36 percent who put the paper mountain as the first priority for addressing were 35 percent of the respondents who put €lack of timely response' as their most important issue hindering efficient AP processing - either with issues reconciling accounts or addressing exceptions.
An invoice management solution incorporates Purchase Order (PO) matching, and non-PO invoice coding and authorisation processing. Query and dispute resolution is easy and swift due to immediate on-line access to all relevant documents (original and supporting) and the exact position of an invoice in its processing journey can be instantly pinpointed.
Duplicate invoices are no longer an issue due to the automatic matching and/or coding and authorisation process, and late payments are eliminated and early discount take-up optimised through enhanced processing visibility and flag and alert facilities.
All this means - in addition to enhanced supplier relations and the possibility of more beneficial contracts - far greater efficiency in the AP department, plus a reduction in overheads and cost (think stationery, printing postage, and paper storage expense, late payment penalties, duplicate payment excess, as well as uneconomic staff deployment).
I mentioned earlier that it would seem senior executives are missing the point in overlooking the value of an efficient Accounts Payable department - and it would seem it's an even greater opportunity missed given that businesses who move to automated systems regularly report a return on investment measured in months.
Yet, the report points to many business's Accounts Payable as the poor relation lurking in the shadows when it comes to apportion of the internal investment pot, which - in view of the above claim - seems not only illogical but very short-sighted on the part of the pot holders.
The Aberdeen Group report From the Shadows to the Forefront: AP Automation and the Strategic Vision cites problems associated with processing paper documents as the number one €market pressure' on AP departments, specifying the difficulty of €finding' documents as a major issue.
The advantages of removing the physical presence of paper from processing - whether by scanning and using OCR (optical character recognition) to extract key data or incorporating electronic documents in the process (e-invoicing, e-forms, for example) - is only the start. Workflow can further enhance the department's streamlining and efficiency, as well freeing staff to concentrate on more strategic tasks.
The benefits of removing paper from business processes are well documented. In fact, they're so well-documented there's sometimes risk of them becoming a mantra-type recitation and of losing sight of exactly the extent of the advantages of eliminating paper from processing.
Whereas a paper document can only be in one place at one time electronic documents, while held centrally, are available to everyone with appropriate level of authorisation, 24/7, regardless of office location, building, town, or even country.
There are no more lost documents and gone are those over-burdening storage requirements - all those dusty filing cabinets languishing in the walkways of wasted space.
One hundred financial services executives were surveyed for the Aberdeen Group's report. On the heels of the 36 percent who put the paper mountain as the first priority for addressing were 35 percent of the respondents who put €lack of timely response' as their most important issue hindering efficient AP processing - either with issues reconciling accounts or addressing exceptions.
An invoice management solution incorporates Purchase Order (PO) matching, and non-PO invoice coding and authorisation processing. Query and dispute resolution is easy and swift due to immediate on-line access to all relevant documents (original and supporting) and the exact position of an invoice in its processing journey can be instantly pinpointed.
Duplicate invoices are no longer an issue due to the automatic matching and/or coding and authorisation process, and late payments are eliminated and early discount take-up optimised through enhanced processing visibility and flag and alert facilities.
All this means - in addition to enhanced supplier relations and the possibility of more beneficial contracts - far greater efficiency in the AP department, plus a reduction in overheads and cost (think stationery, printing postage, and paper storage expense, late payment penalties, duplicate payment excess, as well as uneconomic staff deployment).
I mentioned earlier that it would seem senior executives are missing the point in overlooking the value of an efficient Accounts Payable department - and it would seem it's an even greater opportunity missed given that businesses who move to automated systems regularly report a return on investment measured in months.