AP Automation Savings: Maximizing Your AP Budget
If you’re on the fence about automating your AP department, you may be wondering how much money you’ll actually save. The price tag attached to automation solutions can sometimes seem intimidating—however, when you take into account the vast amount that enterprise-level AP automation can save you, it greatly outweighs the cost of manual or lower-level processes. Beyond just eliminating manual efforts, there are so many other AP automation savings opportunities that many solutions have to offer, that not everyone realizes. By taking advantage of those AP automation savings, you’ll look back and realize just how much company time and money you could have been saving.
Time = Money
When considering the benefits of AP automation savings, it’s important to take into account the number of tedious manual tasks that your AP clerks have to deal with. Some of these tasks include:
- Opening of mail (invoices)
- Organizing into batches
- Distributing for approval
- Purchase order matching
- Dispute resolution
- Data entry
- Filing and responding to queries from both suppliers and buyers
These sorts of tasks, when performed manually, take up a substantial amount of precious time, and can easily lead to a payables department that is constantly running behind; despite hard work and diligence. With enterprise-level AP automation, these tasks are completed promptly and accurately, giving your clerks back their time to prioritize more important tasks. This also means a faster and consistent payables department free of late fees, and full of effective time management.
Productivity and Accuracy
Technical mundane tasks, as mentioned before, eat up large amounts of time in an AP department. Automating these tasks allows for greater production consistently coming from your department. AP clerks will be able to hone their focus in on bigger and more pressing tasks. This also means that processes such as invoice input, that once were highly susceptible to simple human error, are now more accurate.
Enterprise-level AP Automation utilizes AI—specifically, machine learning—in its e-invoicing processes. With machine learning, the system uses a confidence level in order to make corrections on invoices. If the confidence level is low, it requires simple human review to confirm. In time, however, this confidence level increases, and the system can make precise corrections without review. This ensures a seamless invoice process that guarantees accuracy.
The Obvious: Cost of Paper
The money saved by eliminating paper invoices is probably an obvious source of AP automation savings. However, beyond just the invoice itself, there are other places that you will save money through AP automation. You would be saving money on both envelopes and stamps by taking advantage of the supplier portal and e-invoicing for vendor communications. On top of that, thanks to virtual pay options, you can cut out the running cost of printing paper checks.
Early Pay Advantages
When you have your invoices submitted early, life is good. Your supplier is happy, and your department has one less invoice to worry about—along with avoiding late fees. On top of that, when your payables system is automated, you have the option of taking advantage of dynamic discounting. With dynamic discounting, you’re able to get a discounted price, simply by paying your invoice early. Through a supplier portal, you’re able to select the date you’d like to pay your invoice early. The exact discount will be calculated based on the day you select. Your supplier can choose to accept the date and the early-pay discount, or can propose a new date, for which the new discount would be automatically determined.
Going paperless means less chances for potential scams. Plenty of fraud schemes take the form of a physical printed invoice that looks identical to a normal one. With e-invoicing, this form of fraud is eliminated. Another feature that enterprise-level automation solutions will often offer is PO Matching. With PO Matching, invoices are compared to the purchase order, and if there are any discrepancies between the two, the system will flag the invoice. On top of that, those same high-level solutions will flag duplicate or otherwise suspicious invoices. Once your department has been automated, clerks aren’t spending their time on tedious tasks, so it’s easier for them to be trained on and keep an eye out for potentially fraudulent activities.
Overall Abundance of Savings Opportunities
Clearly, there are a substantial amount of AP automation savings to take advantage of. Benefits from these savings include no more late fees, less input errors leading to invoice revisions, cost of paper eliminated, effective time application by staff, and higher productivity—to name a few. By automating your payables department, you unlock the door to exceptional savings for the entire company.