Recently, Ardent Partners released a study they call the “State of ePayables” report. In it, they lay out what is the “Best in Class” when it comes to successful accounts payable automation. We hit it here on the ePayables winning mix.
The Winning Mix
Criteria for crossing that finish line include those organizations with the shortest invoice process cycle and the lowest average processing costs. These winning mixes take dedication and best practices to be successful.
The manner of processing is straight-through. That means the business’ payment method is scheduled and set to process with no employees touching a paper invoice or opening an email attachment. They only review completed transactions after processing and payment. AP departments gain insight improvements, approved access, and real-time visibility. AP Automation is an example of getting faster approvals with more visibility.
A company that makes the best use of auto-coding, E-invoicing, and matching standardizes the process, enabling it to fully automate many, if not most of the invoice receipts and payments. Reduced processing time quickly turns into reduced costs as well. If a business can straight-through process at least 65 percent of their invoices, this places them in the “Best in Class” category. This in turn, gives them the power of dynamic discounting.
You Need Your Vendors
ePayables winning mix cannot be accomplished however unless the business also works to bring every supplier into the new AP system. Each one has to sign-up for E-invoicing, which often finds resistance in a supplier’s billing department. Personnel often have a mistaken belief that reducing their workload also reduces their responsibility. This resistance disappears once management of the supplier can show that this eliminates mailing and other costs, as well as eliminating the wasted time needed to chase down late payments.
New software and hardware cannot fix everything though. AP managers of both businesses in the invoice processing cycle must be dedicated to eliminating inefficient methods and actions. If they are not on board then the ePayables winning mix isn’t there. It’s hard to be a winner but with asserted effort to cut processing time and cost you can see this success play out.