The Importance of Accounts Payable Automation for Business Growth

Do less and yet deliver more. This is the year organizations will deploy real-time and accounts payable automation technologies to produce quantifiable benefits, cost savings and improved customer engagements.

In a global marketplace that has become increasingly competitive, accounts payable automation is a way to reduce costs, save time, and increase accuracy. In 2023, we expect businesses to prioritize ways to apply automation throughout their organizations and operations.  This article discusses how deploying accounts payable automation is critical for business growth. 

41% of senior finance executives cited improved visibility into invoices and payables information as the biggest benefit of AP automation. 

The Future is in Accounts Payable Automation 

Automation is the future. In order for today's business to scale, replace the manual with a digitized service, and you are setting the stage for success.

We have yet to see one report highlighting the benefits of manual processing. Going automated with accounting software solutions will: cut costs, allow for growth and boost employee morale, among other benefits.

Thanks to artificial intelligence (AI), machine learning (ML), and the cloud, the accounts payable automation industry is booming. Expect the market to hit somewhere in the ballpark of USD 6 Billion by 2029.

The concept is simple, eliminate the dreaded manual invoicing and data entry. A good AP automation solution combines Optical Character Recognition with other technologies to automate the entire AP process, including matching invoices with purchase orders and routing documents electronically through the workflow process.

Automation has many benefits

• A decrease in fraudulent cheques 
• Improved accuracy
• Better compliance and monitoring
• Enhanced data visibility and insight
• Significant cost savings

Accounts Payable Automation Cost Savings 

Delivering a better bottom line is game strategy number one when it comes to growing a business, and when organizations move away from paper-based processes, the savings speak for themselves. 

Invoice Processing Costs 

While the cost of invoice processing varies, most businesses find it sits anywhere between  $15 and $40 per invoice. Here’s the breakdown of some of the direct and indirect costs that can impact : 

• Data input errors

• Labour

• Supply Chain

• Legacy Technology

• Outdated processes

• Payment Methods 

• Mail Costs 

• Office Supplies

• Time waste

Labour Costs 

Moving forward, finance teams need to start looking at quantifying the qualitative. In particular, successful CFOs are reevaluating how workforce time is organized and introducing processes that no longer require human intervention. 

Labour costs are a bit trickier to calculate, but you’ll likely be surprised at the total cost of paying staff for a task that can be automated. Moreover, time can be spent on engaging tasks that staff enjoy versus a manual task that is error-prone, time-consuming and quite frankly a killjoy for the accounting team.  

To get an estimate of how many hours are wasted—look at how many people it takes per week to process an invoice. Then calculate the hours spent times their wage in one month.

Hidden costs to look for:

Cost of paper, stamps, and time wasted waiting on paper invoices to be mailed out or received. Plus, accounting software and security systems.

5 Qualitative Benefits of Going Automated

Deloitte and Blue Prism released a report on the benefits of automation. Contrary to popular assumptions about artificial intelligence and automation, the study shows that the impact on businesses' profitability and employees' productivity is overwhelmingly positive.

1. Better process quality: automation delivers transaction accuracy, greater controls, and standardization. Data capture provides detailed analytics that highlight process improvement opportunities.
2. Flexible and scalable: It allows processes to be scheduled, objects to be reused for other processes as needed, and automation technologies to be reassigned when more important processes arise.
3. Improved customer experience: Enables organizations to use customer data better to improve customer experiences by anticipating their needs.
4. Greater return on human capital: Automating approvals creates organizational capacity that can be repurposed toward more complex or higher-value tasks. For example, an employee who previously manually approved purchase orders can shift focus to negotiating better vendor pricing.
5. Acceleration of innovation within an organization: Organizations can use big data and analytics to make big bets on next-generation intelligent automation workforce capabilities and enable the entire organization to adopt a “test and learn” mentality.

Are you a company looking for a way to use payment innovation to drive value?  We can help. Contact one of our payment specialists today!