Accounts Payable (AP) looks very different for each business. Large corporations have entire departments and teams dedicated to AP, whereas SME’s may be juggling it alongside the many other responsibilities involved in running a business. When it comes to automating your AP you might be questioning whether it’s worth it, or whether your business is big enough to benefit.
Long gone are the days when AP Automation software was a luxury, it has now become a strategic necessity, and technology advancements make it affordable for even the smallest of businesses.
AP Automation is designed to give businesses the highest possible ROI, but it’s important when considering ROI to look at the value relative to your unique AP processes and establish the biggest challenges facing your business. Only once you’ve done this can you establish the true areas of value it could add to your organisation, against the cost of an AP Automation solution.
40% of businesses are impacted by fraud annually and it costs businesses a staggering £193 billion a year. Invoice fraud in particular amounted to 55% of the money lost to businesses between December 2021 and February 2022. AP Automation software can identify fraudulent activity quickly and mitigate the risk, through clever bank account verification features giving your business enhanced security and an extra layer of protection.
The costs of processing an invoice manually vary significantly, but on average it costs approximately £15 to process a single invoice, and that doesn’t include hidden costs such as fraudulent activity and the cost of human error. As the running joke in AP departments goes, is the cost of processing your £11 invoice more than the invoice itself? Automating the process can realise savings of 60-80% bringing the cost of processing an invoice down to as little as £5 in some cases.
Typically invoices sit on desks or in inboxes for days, if not weeks on end waiting for approval, but AP Automation software cuts through this by streamlining the approval process so you can pay your invoices quicker, improve supplier relationships and take advantage of early payment discounts. Here’s a sobering statistic; more than 75% of early payment supplier discounts go unclaimed because AP departments cannot process the invoice quickly enough. Research by the Aberdeen Group has found that automating your AP can speed up invoice payment by 18% fewer days outstanding, resulting in invoice payments taking 5.5 days on average.
Do you struggle to make informed budgeting decisions? It can be difficult to make financial decisions and draft budgets when you can’t get an accurate, real-time insight into your AP function. AP Automation software captures and processes invoices quickly giving immediate and accurate insight into your financial situation so you can make decisions accordingly, not based on guesswork.
Human error is unavoidable, especially when you are dealing with significant levels of manual data entry, and a staggering 92% of financial experts claim duplicate payments and overpayments are too common within the AP function. Mistakes can have big consequences, if not caught early, and can result in delays, increased costs to put right or late payment penalties from suppliers. Automating your AP process removes the risk of human error as all your figures are transferred automatically at the click of a button.
To answer our initial question ‘is AP Automation worth it?’, we can conclude that we most certainly think it is. Regardless of business size, automating your accounts payable has become a strategic necessity to remain competitive and to help you gain the financial visibility needed to make sensible budgeting decisions. When it comes to assessing ROI it is relative to your AP processes, and only once you identify the challenges your AP departments are facing can you uncover the true ROI a robust AP Automation solution can provide, and this isn’t always the monetary value saved.
To discuss our new AP Automation software, available with Opera 3 SQL SE, then please contact us today.
Posted On: July 12, 2023
