AP Automation Can Fix Your Paper Problem

The transfer of information and documents throughout an organization is essential to its success. This internal communication can make or break a company and determine whether or not it can maintain a competitive edge. Paper documents pose a significant obstacle to companies trying to improve their workflow. Every point where paper is involved represents a potential holdup or mistake. But many businesses are still hesitant to automate their processes, citing concerns ranging from employee resistance to lack of executive support. The purpose of this paper is to alleviate organizations’ worries about removing paper, particularly as it relates to the Accounts Payable (AP) process.

How Prevalent is Paper?

Overall, paper consumption has been decreasing for the past few years, a positive development. However, in a 2014 survey by AIIM, 21 percent of respondents still said that their organizations are consuming more paper than they used to. Another 34 percent believe their use of paper has remained relatively unchanged. In another study, the Accounts Payable Network found that the typical company received only 10 percent of its invoices electronically. There is obvious room for these companies to reduce their dependence on paper, allowing them to reap the benefits of AP Automation.

Paper Cuts Don’t Have to Hurt

Eliminating paper can be not only painless, but also relieving. In fact, an impressive 77 percent of companies report that they saw an ROI in 18 months or less. So why aren’t more businesses adopting electronic invoicing? The greatest impediment in reducing paper is lack of managerial support. But there are clear benefits for management to reduce paper dependency. Electronic Invoice Presentment and Payment (EIPP) can improve document cycle times, in turn accelerating business cycles. Management also gains greater visibility into the invoice approval process.

Fixing the Paper Problem

According to a study by the Institute of Finance and Management, the number one area in which AP departments plan to improve is in automated workflows for invoice approval and exceptions. However, workflow in many companies can be a very intricate process, raising the question of whether automated AP solutions can be designed to accommodate those intricacies at a reasonable price. The answer to that question is a resounding “Yes!” Paper—and even other formats like PDF that require manual handling or data entry—introduce possible errors at almost every point of their use. If a high priority invoice is received that needs to be processed quickly, it is difficult to differentiate this invoice from all of the others, often leading to it being processed significantly more slowly than desired. Even if the invoice is not high priority, AP departments must spend enormous amounts of time making sure that the invoice moves through the appropriate approval channels before payment is made. This time could otherwise be spent pursuing more strategic objectives.

If you organization uses purchase orders, the approval process can be further streamlined by straight-through invoice processing. This allows an invoice which matches the PO to be automatically approved, drastically reducing the time it takes to have an invoice ready to be paid. This benefits a company by improving the number of discounts they can capture. Interestingly, only 29 percent of companies currently use this time and money saving technology, representing an area for businesses to gain an edge over their competition. As companies utilize this system, they may even process as much as 50 percent, if not more, of their invoices straight-through. Even after an invoice is approved and payment is made, paper invoices can still cause problems. Auditors can access e-invoices with only a few clicks, but tracking down paper documents is much more labor and time intensive. Supplier inquiries may also require your AP department to hunt down physical documents that could otherwise be accessed in seconds with electronic data storage. While these inefficiencies were the norm only a decade ago, companies cannot afford to miss out on discounts, jeopardize their credit rating, or risk their regulatory compliance standings by continuing to use paper.

Measuring Success

As with any change in your business, it is vital that you track the performance of your EIPP solution. Consider collecting data on indicators such as:

  • Processing cost per invoice
  • Number of invoices processed each month per full-time employee
  • Discounts captured
  • Number of suppliers submitting invoices electronically
  • Number of suppliers offering early payment discounts


If your company is still using paper invoices, chances are you are wasting valuable time and money that could otherwise be saved by switching to Accounts Payable Automation. The errors and inefficiencies of handling, printing, and storing paper documents will decline dramatically, if not disappear, with an EIPP solution. Automated workflow will allow your AP department to either reduce its labor costs or pour more resources into cash flow analysis and process efficiency. Reducing your reliance on paper will help streamline your processes, making your organization more profitable and competitive.

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