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How Automated is your AP Department?

Since the beginning of computers, businesses have moved from slow, manual processing of data into fully automated applications. Applications having immediate impacts on the corporate bottom-line moved first, followed by the rest of the front-office processes. Corporations have begun moving their back-office processes into the automation world, starting with the accounts payable (AP) department. Last year iPayables, conducted a survey to determine the efficiency of the different methods of invoice processing in use today.

iPayables sent out approximately 30,000 surveys to the financial professionals influential in how their AP department operates and/or are responsible for AP departmental decision-making. The survey asked five questions to gauge how invoices are received, how they are processed, and how many employees it took to process them. The surveyed companies all have revenues greater than $50,000,000.00 annually, and were asked the following five questions:

  1. How many invoices, approximately, does your company process?
  • Total number?
  • Of the total, how many are paper?
  • How many are e-mail?
  • How many are manually entered?
  • How many are processed via OCR?
  • Of the OCR invoices, how many are processed without manual intervention?
  • How many are processed fully electronically?
  1. What percentage of non-PO invoices are routed through approved workflow?

Choose: 1-10, 11-20, 21-30, 31-40, 41-50, 51-60, 61-70,71-80, 81-90, 91-100

  1. What percentage of PO invoices are routed through Automated Match?

Choose: 1-10, 11-20, 21-30, 31-40, 41-50, 51-60, 61-70, 71-80, 81-90, 91-100

  1. How many employees are processing invoices?

Choose: _____ full-time _____ part-time

  1. What is your role in the company? (List title and company)

The Results

Participants were asked about the total volume of invoices processed by their organizations each month, to determine the size of the AP department, and the amount of work done each month. The data gathered in the survey quantified trends and correlated data points for the study. The AP departments participating in the survey were large, processing on average around 22,000 invoices a month.

The data analysis determined 31% of the received invoices were paper, 10% were received via e-mail, and 59% were received electronically; however, of the responding companies, only 28% reported receiving their invoices in electronic format. This indicates electronic processing is heavily favored by larger companies, with larger volumes of invoices to deal with each month, where economies of scale make electronic processing cost-effective.

Electronically received invoices are, by definition, fed straight into the payables process, and remain at 59%; of the remaining 41%, they are keyed manually (20%) or scanned via OCR (21%).

Responses indicate AP workflow is used more by companies without PO invoices, who process invoices manually. An indicator of automated workflow’s impact on processing efficiency is it’s used by 82% of companies with some electronic or OCR input who are not completely PO based.


The results from this survey indicate accounts payable automation is by far the most efficient way to receive and process invoice data, regardless of your organization’s size; smaller companies will see increases in efficiency if they automate their AP to electronic invoicing, at more than twice the rate of companies using OCR or OCR and manual input. The drawback for smaller companies is the cost of the automation process; suppliers have to be willing to participate in the electronic invoicing, and the cost of the software is a large factor. For companies with >$50,000,000.00 in revenue, the data indicates they would benefit from automation, by reducing labor costs and increasing revenue by taking advantage of early-pay discounts (dynamic discounting).

Only 28% of the responding companies in this survey utilize automation; this means 72% of the respondents can realize the benefits of electronic invoicing, by taking advantage of AP automation and eliminating or greatly reducing the amount of paper and OCR invoices they currently process.

Survey results indicate electronic invoicing is clearly superior to paper, e-mail and OCR-based invoices; it requires less time, increases the efficiency of the AP workers, allows the company to reduce the number of workers dedicated to invoice processing, speeds up invoice processing by an average of ten days per invoice, and allows the company to benefit from early-pay discounts.

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