The urgency for smart accounts payable automation solutions keeps increasing while organizations that use little to no automation are subsequently missing 4 key benefits.
Accounts Payable automation today
According to a recent study by Accenture, only 34% of finance tasks are currently automated. This relatively low percentage might come as a surprise, but there is a promising outlook: 77% of all CFOs are heading up efforts to improve efficiency through adoption of digital technology.
As CFOs are making the internal case for digitalization, the urgency for accounts payable automation keeps increasing. The operational challenges caused by the pandemic have forced many companies to redesign and streamline their payment processes. Even before COVID’s disruption, the accounts payable (AP) function had a reputation for being costly, time-consuming, and prone to human error due to the large number of manual tasks. Organizations that use little to no accounts payable automation are subsequently missing 4 key benefits:
4 key benefits of Accounts Payable automation solutions
1) Lower invoice processing costs
The cost of processing an invoice is a key metric that is often overlooked because of the high hidden costs involved. Although tricky to measure, it is the ideal starting point to evaluate the accounts payable overhead cost. According to several research firms (such as Aberdeen Group, Hackett and Gartner), the average cost to manually process an invoice can be up to €25 per invoice. Depending on the level of AP automation applied, organizations can cut these costs to €4 or less and thus realize significant savings of 80% or more. No surprise that cost reduction through accounts payable automation is the number one initiative on many finance transformation agendas in 2021. (The Hackett Group, 2021)
2) Increase invoice processing turnaround
Manual data entry is a well-known example that slows down the AP process. However, most professionals in this space are also set back by numerous activities such as:
- Extracting and (re)matching key data
- Identifying and pursuing the right approvers
- Adhering to internal business rules
- Following auditor guidelines
3) Eliminate manual tasks and paper handling
Manually handling invoices is not only dull and tedious, but it also increases the chance of errors. Unburden your team from repetitive data entry tasks so they can focus on more meaningful work. In today’s digital era, Accounts Payable automation makes it possible to receive, approve and post invoices directly to your ERP and financial systems through seamless integration. Add AI (Artificial Intelligence) to this equation and the entire AP process can almost become ”touchless”.
The IBM Institute for Business Value surveyed 1.500 executives globally on the effects of smart automation initiatives. The study shows that 90% of executives whose organizations are scaling smart automation, say it creates higher-value work for their employees.
4) Mitigate fraud and compliance risk
The vast majority of finance departments have experienced some type of fraud. Departments with the least accounts payable automation are the most vulnerable to fraud and compliance risks. A lack of automation, leaves AP teams without appropriate tools to track document history and an audit trail. On top of that, there is no way to monitor whether employees follow the correct approval procedures.
Here is how these risks can be mitigated through Account Payable automation:
- AI-powered data capture: AI-driven accounts payable solutions such as Cevinio, capture information from invoices without staff interference and validate or match the information against data from your ERP system.
- Advanced Approval Workflow: workflow tools automatically forward invoices based on pre-defined authorization rules. Regardless of how complex some business rules may be, a decent Accounts Payable automation solution will eliminate the chance that invoices are approved by users without the appropriate authorization. Features like these are essential to ultimately ensure compliance and transparency.
Are you ready to lead the Accounts Payable automation in your organization and make a direct and positive impact on the bottom line? Let’s get in touch to discuss how Cevinio can add value to your business.