COVID-19 has accelerated the push to digitize AP. Not only does automation provide increased visibility, control and cost savings, but it has become a business imperative in the midst of a quarantine and remote work requirements, helping to ensure that operations can continue uninterrupted, payments can be made, and money can flow between organizations.
As a result of these critical benefits, many companies are beginning – or furthering – their automation journeys. As with all journeys, it’s important to have a roadmap to get you where you want to go, and a key first step is identifying the goals you want to achieve. Following are six worthy goals to consider in digitizing AP:
- Get rid of paper from the start. With some organizations receiving tens or hundreds of thousands of invoices a year, it’s easy to get buried in paper. Paper invoices can easily get lost or misplaced, and until they are entered into your system, you don’t know what invoices you have in house. Not only is keying in invoices tedious and error-prone, it’s also a waste of time and money. Organizations have a few options to get rid of paper – such as scanning paper invoices themselves or using a Capture-as-a-Service (CaaS) outsourcer to do so. All things considered, it’s best to get out of the invoice entry business – whether your staff is entering them manually or scanning each one – and use a CaaS provider, so you can focus on your core competency.
- Gain real-time access to all the data. Effective AP operations depends on knowing where your invoices are at all times, who acted upon each, what they did – and when they acted. In addition, having visibility into each invoice is key. An invoice contains valuable data, such as how much you owe, when it’s due, and any early-payment discounts you might be able to take advantage of. This information isn’t only important for AP, but for other departments as well. For example, Treasury can use this invoice data to better manage cash flow, and Accounting will be able to conduct more accurate, faster month-end closes.
- Strategically manage payments. Being able to process invoices quickly, well before their due date, helps organizations avoid late-payment penalties. But, imagine taking it a step further and being able to take advantage of early-payment discounts, and strategically determine which invoices to pay, when, based on cash flow and the discounts that are available.
- Enable remote capabilities. Having the freedom to process and approve invoices, regardless of when and where you want to do that, has become a must-have capability in today’s new business environment. Mobile and virtual operations not only empower AP but all reviewers throughout the organization as well.
- Save time and money. It just doesn’t make sense to waste time processing invoices manually. In addition to visibility, control and accuracy issues, it’s inefficient and costly. And, the impact of automation can be felt well beyond AP. It saves time and streamlines the approval process for reviewers across the organization..
Help prevent fraud.
An automated system can more than pay for itself if it catches even one fraudulent invoice, since fraud could cause a company to lose about 5% of its revenue annually, representing about $3.7 trillion for businesses globally, according to The ACFE [Association of Certified Fraud Examiners] Global Fraud Study. And it’s a prevalent problem that often targets AP, because that’s where invoices are teed up for payment. Over 80 percent of businesses said that they experienced payments fraud in 2019, according to the 2020 AFP Payments Fraud & Control Survey. Invoice automation helps to prevent fraud by enabling companies to enforce sound policies – such as requiring two approvers for invoices over a certain amount. In addition, the software can detect anomalies, such as duplicate invoices, or in a specific time period. Even if you focus on a couple of these goals, you’ll likely find that you can achieve benefits in other areas as well as by-products of automation. The important thing is put a stake in the ground and begin the journey. By identifying your goals for automation – and including key stakeholders in the process to capture key requirements and ensure buy-in – you’ll be well on your way to achieving greater visibility, control, savings and accuracy – and the agility to operate in any business climate.
Learn more about how to get started with AP Automation.