It’s easy to see the disadvantages of a manual, paper-based accounts payable system: high costs, inaccuracy and inefficiency. Yet investment in AP automation tends to lag behind customer-focused improvements, according to a study discussed in Business Finance. Paper checks still account for over half of business-to-business payments, but that number is steadily declining as AP departments gradually move toward automated electronic payments.
Business Finance notes four factors that make AP automation an attractive investment for many organizations.
- Providing superior spending control. This is the main advantage organizations hope to secure by adopting AP automation. An automated system integrates business expense rules with software tools, creating a seamless workflow for authorizing, procuring, tracking and processing business expenses. Because spending policies are programmed into every step of the process, managers gain increased visibility into areas where business processes can be improved and spending managed more effectively.
- Building preferred vendor relationships. With greater transparency into spending, managers can streamline rules and guidelines and negotiate more cost-effective preferred vendor relationships.
- Reducing errors that slow the AP process. Mishandling and simple data-entry errors can trigger exceptions that grind payments to a halt.
- Securing discounts through early payments. According to Business Finance, many organizations miss out when it comes to discounts for paying early. At present, 43 percent of those surveyed in the study are capturing less than one-tenth of the available discounts.
Organizations are gradually catching on to these advantages of using AP automation, according to Business Finance. Over 80 percent of those surveyed expect to use electronic payments for the majority of business-to-business payments in the near future. Those who choose to make the investment sooner rather than later may find themselves ahead of the competition. Get started with invoice management software and the ROI will compel purchase order and payment processing, too.
We’d appreciate hearing your feedback. How can organizations make sure AP automation is a priority? Please share your thoughts below in the comments section!
- Driving AP Success With Automation Part 3: How to Save Time and Money While Increasing Compliance
- Driving AP Success With Automation Part 2: How to Create More Efficient Processes With AP Automation
- VAT IT Partners With Emburse to Help Companies Save 27% on Expenses
- Driving Success With Automation Part 1: 4 Common AP Management Bottlenecks
- The Future of Finance: 5 Predictions For Digital Transformation in 2022 And Beyond
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.