In today’s day and age of technological advancement, organizations all over the globe are looking to automate and streamline their Accounts Payable and Invoicing processes. Hence adopting an AP Automation Suite with e-Invoicing capabilities seems like a no-brainer with the numerous benefits organizations reap from the initiative, like lower invoice processing costs, optimized working capital, better visibility into the entire invoice cycle, better liquidity management and stronger supplier relations.
However, for an organization to derive the maximum value out of this digitization initiative, they need to be mindful of a few factors. These factors become critical in determining the success of an AP Automation initiative:
Cost per invoice $17.61 $2.42 86% more savings
Early Payment Discount 0.02% 0.16% 700% more discount earned
(taken as % of Spend)
Invoices per FTE 9091 25,047 175% more invoices per FTE
Invoice Cycle(PO Days) 7 5 29% faster cycle time
Invoice Cycle(Non-PO Days) 10 7 30% faster cycle time
Perform a current state analysis: Start with analyzing and calculating the current state of things like-
Cost Per Invoice =Total AP Cost / Annual Invoice Volume
Total A/P Cost = FTEs* Average FTE C&B+ Outsourcing/Technology Costs
Early Payment Discounts as A % Of Your Total Spend
Annual Invoice Volume
AP Avg. FTE Cost and Benefits
Calculate Potential Benefits : The next step would be to calculate benefits from the AP Automation initiative, this will include:
Early Payment Discounts Captured
Invoice Processing Cost Savings
Improvements in cycle time
Improvements in AP FTE utilization
Analyze e-Invoicing Investment Cost: This step will include, stating the costs the company will incur when they invest in an AP Automation solution.
These should include both recurring and one-time costs.
An elaborate plan that is built based on the steps that this article spells out while adopting and Automating their invoicing process will ensure the organization reaps maximum benefits and also that their entire transition process is streamlined and smooth.
To obtain an end-to-end guide on how to build an Automation Suite roll-out strategy read our whitepaper titled “The eInvoicing Playbook How to Plan for eInvoicing and AP Transformation Success”
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