From a strict cost-benefit standpoint, automation technology is now powerful enough to make a very persuasive case. A white paper by The Hackett Group1, a worldwide consulting firm, shows that the more businesses automate their accounts payable systems, the more they reduce costs and transaction times.
Saving almost 40 percent per invoice will add up to sizable savings very quickly. Based on the values in the chart above, a company processing 400,000 invoices annually will save $1.27 million — far more than it costs to invest in and implement automation.
The savings in transaction time — valuable in their own right — point to further benefits. Accounts payable has to handle standard invoicing as well as special cases, and those exceptions to the rule can require lots of time and attention to resolve. With automation software looking after the invoices that fit the rule, workers in accounts payable can afford to focus on the exceptions. It’s the ideal division of labor for a department with a mixture of systematic tasks and issues requiring real problem solving.
Finally, automation can help companies realize the benefits associated with early payment discounts. Earning the discount requires first identifying and then processing particular invoices by a particular date. And if an AP clerk has a stack of invoices to process, those particular invoices may not be reached in time. Opportunities for savings may fly out the window — all because of the pace and tedium of a manual process. With every business placing a premium on cash management, every business wants to benefit from the discounts available to them. An automated procedure can help them do just that.