Why automate accounts payable? Accounts payable departments often use lots of paper and manual processing is one of the most expensive components of the business accounting cycle. Accounts payable typically requires manual data entry and significant labor costs. Manual data entry is also error-prone.
Susie West of Ardent Partners presented a survey (What Makes An Accounts Payable Function Best-in-Class? 2012). Approximately 200 people who work in accounts payable, finance, or procurement departments were asked about the challenges they face and how they plan to make improvements in the efficiency of their accounts payable departments.
43-percent of survey participants said their accounts payable department still uses paper and enters data manually. 36-percent identified the amount of labor spent on processing paper invoices as a major cost. A typical process from purchase to pay may involve a variety of documents and approvals must often be tracked down. The process is time-consuming, and 52-percent of the participants identified the approval process as something they’d like to improve.
Many accounts payable departments seek to improve processing efficiency by investing in automated invoice processing or an invoice management solution. Automation makes managing change in accounts payable more efficient by providing the following benefits:
- Data entry costs are reduced or eliminated
- The cost of the approval process can be cut by up to 50-percent
- Errors are reduced due to fewer manual tasks
- Digital documents reduce storage costs and free up office space
- Digital files provide increased document security
- Staff are available for other duties
Why automate accounts payable? Rather than spending time doing manual data entry, getting approvals, and locating hard copies, staff can spend time negotiating discounts with suppliers. Improved relationships with suppliers often result when invoices get paid promptly. When staff focuses less time on manual tasks, job satisfaction and productivity also improves.
Source: Susie West. What Makes An Accounts Payable Function Best-in-Class? (2012, April 4). Retrieved June 9, 2012, from