The most effective way to drive your cost of invoice processing down is to automate your accounts payable. It’s no surprise to anyone that manual payment processes are time-consuming and error-prone, making them expensive and inefficient to maintain.
In contrast, an accounts payable automation solution is fast, accurate and efficient; it can process greater volumes that a human can, and with greater reliability. This gets the cost of invoice processing right down, but the question is, how low can you go? Can you do better?
Step 1: Optimise business processes
To achieve the best results, you need to optimise your accounts payable processes ahead of automation. This means addressing bottlenecks and eliminating double-handling or other inefficient practices; clearly, it makes little sense to automate a poor process.
It’s advisable to work with a procure-to-pay specialist to optimise your business processes and document the scope and requirements for your software implementation. They should guide you on what best practice accounts payable looks like for a company like yours and tell you what’s achievable with automation in terms of your cost of processing.
Step 2: Automate and continuously improve accounts payable
.When software has been rolled out, it should not be a case of ‘set and forget’. Typically, there are many opportunities to continue to drive down the cost of invoice processing. One of the benefits of automation is that the software generates data that can be used to further optimise the accounts payable process.
For example, the solution may record accounts payable performance data, such as:
– cost to process a single invoice,
– invoice exception rate,
– percentage of documents linked to a purchase order,
– percentage of auto-processed invoices, and more.
With these data insights, companies may be able to further fine-tune the procure-to-pay process, driving down invoice processing costs. This may mean working with suppliers to get the number of invoice exceptions down and improve the rate of straight-through processing.
Step 3: Find out what’s holding you back
But what if your cost of processing is still high (more than a few dollars per invoice), even after automating and further fine-tuning your process? If this is the case, you’ll need to identify why. Sometimes this can happen for the following reasons:
Poor implementation – Your vendor may not have ‘trained’ your Optical Character Recognition technology to recognise and extract data from a varied set of documents, Therefore, it may not be reducing keystrokes by an optimal 90% or more from go-live.
Inefficiencies in software configuration – Depending on how your system is set up and the role of your Enterprise Resource Planning (ERP) system in your accounts payable process, there may be gaps in invoice processing that require ongoing manual interventions. This adds to your cost of processing.
Legacy systems – Older systems may not be hosted in the cloud so may be more expensive to run and less efficient. Further, these systems may also not offer the best and latest technologies that improve accuracy and productivity, helping to lower the cost of processing.
Lack of technical support – Over the years, legacy systems can become poorly supported by vendors. This means workorders cannot always be carried out in good time, resulting in sub-standard solution performance and frustrating workarounds for accounts payable staff. If a solution does not work well, its inefficiencies push the cost of invoice processing back up.
Problems in any of these areas will inflate your cost of processing. Over time this can cost your business significantly, so it’s worth addressing these issues sooner rather than later.
What we offer
At Efficiency Leaders, we offer an accounts payable automation health check service. We can analyse your automated workflows and solution performance end-to-end and advise you on how to optimise your solution to reduce your cost of processing.
By engaging Efficiency Leaders Consulting Services, you can:
- Gain a health check report on how well your automation solution is performing
- Lower your cost of processing and realise the full potential of AP automation
- Reconfigure your current software to improve performance, efficiency, and usability
- Have Efficiency Leaders take over your technical support
- Have clarity over the role of your ERP in your accounts payable process
- Upgrade to Efficiency Leaders’ solution RapidAP, with no obligation to do so.
To get the most out of your procure-to-pay automation software, get in touch with Efficiency Leaders Consulting Services today at +61 2 8004 5446 or email firstname.lastname@example.org