In part 1 of this blog series we took a look at the two major attributes of a best in class accounts payable operation and how electronic invoicing contributes to achievement of faster cycle times and lower invoice processing costs.

The next two attributes addresses the essential two metrics of an accounts payable function and hence separates best in class accounts payable operations from their peers are as stated below:

3) High Staff Productivity
Removing manual intervention and paper completely from your invoice processing workflow is the key in increasing productivity of the FTEs. According to a study by The Hackett Group, top performers process 175 percent more invoices per FTE than their peers. This ability to handle and process invoices successfully comes from the workflow technology that is able to automatically extract, validate, match and approve data from invoices without any manual intervention whatsoever.

Routine manual paper handling, routing and physical storage of documents create high stress levels for the employees and the enterprise as well. Also, paper invoices can get lost somewhere along a manual invoicing process.This leads to loss of valuable time which could have been used more effectively for higher value business support and analysis.

It is interesting to know that half of all businesses that have automated AP achieved payback in nine months or less according to a research by AIIM.

4) Fewer Supplier Inquiries
Organizations that are dependent on a manual and paper-driven AP process are susceptible to inundation with supplier inquiries, rising miscommunication between suppliers and the buyer, misplacement of invoices and ultimately loss of supplier trust.

The Hackett Group’s AP benchmarks have found that self-service visibility into invoice and payment statuses via an automated invoicing process can reduce inbound supplier inquiries by about a third. Costly repercussions and altercations can be avoided by enterprises if supplier queries can be addressed in a clear, complete and in a time bound manner. In a manual workflow process, it would not be possible to find and retrieve information in a detailed and comprehensive manner.

Electronic invoicing enables organizations to automatically communicate invoice and payment statuses through a self-service portal to suppliers at any given point of time. Such a visibility into the invoicing process and the payment statuses can lead to higher supplier trust, reduce miscommunication and ward off disputes.

‘Automatic invoice status’ was cited as the driver for implementing a supplier portal for over a third of businesses surveyed by Institute of Financial Operations.

The usage of technology not only increases overall processing efficiency but also lets you monitor and track key metrics almost on a real-time basis thereby creating competitive advantages for the enterprise

In the final part of this blog series, we will cover the final two attributes for a best-in-class accounts payable operation.

Related Read:

1. Blog – Attributes of a Best-In-Class AP Operation- Part 1 of 3 – Cost & Time Optimization
2. Blog – Attributes of a Best-In-Class AP Operation – Part 3 of 3 – Invoice Straight-Through Processing & Higher Discounts
3. Blog – Tech-Enabled Supplier Risk Assessment: Unlocking Cost and Time Savings
4. White Paper – The Ins and Outs of Supplier Networks
5. White paper – Supplier Performance Evaluation for Better Results