Your company works hard every day to meet 21st century challenges — but it may be trying to do it still using 19th century A/P practices.

Invoice processing is utterly critical to the success of most companies. It’s also a job that consumes large chunks of Procurement and Purchasing time.

One big reason that invoice processing takes so long?

It’s still, for the most part, paper-based. It’s estimated that 70% to 80% of all invoices still take the mail or fax route. Toss in paper-based recordkeeping and manual data entry and workflow, and it’s no wonder A/P practices are so far behind the times.

The most successful A/P departments have taken steps to automate specific functions.

While there’s an initial cost to automating invoice processing, in most cases it quickly pays for itself.

Among the benefits:

• Cheaper to process invoices. Automated invoicing will trim 33% to 37% from processing costs; it also has helped some companies reduce the number of employees dedicated to A/P.
• Gets you paid faster. Automated A/P processes reduced invoice payment cycle time from an average of 34.4 days to 4.4 days.
• Increased visibility. Usually, you can access invoice status information at any point during the process.
• Staying legal. Automated invoice processing makes it easier for your company to comply with corporate and government financial filing requirements.

Sure, none of this is going to happen overnight.

It’s a big decision for a company to commit to more A/P automation. It’s especially challenging because most companies that lay out the bucks want to see the benefits immediately.

But the most successful implementation occurs one stage at a time. It’s like building blocks, where it’s critical to lay down a solid foundation before you start building upward.

One idea? Start keeping a log of instances when it would’ve been a clear advantage — and money-saver — to have an automated process in place, instead of a clunky, paper-based system.

Tags: A/P, automate, automation, invoice, invoice processing, purchasing