Once while reviewing our all time favourite pizza making process, I chalked down the ingredients like flour, cheese, veggies and pepperoni, but the most important ingredient of all was patience in the process! Similarly, technology has become the chief ingredient across departments of an organization and is a vital parameter for an organization to build competitive advantage.
CFOs during these unprecedented times are facing the challenge of keeping costs at an all time low, while making supplier payments on time to stay compliant, so adopting the path of digitalization and automation seems to be the only workaround.
As per an Ardent Research report, among Finance module, 52% of organizations perceive the Account Payable functions as exceptionally valuable to organizational operations.
Kofax survey states 49% of the firms are partially automated & 10% are fully automated, indicating enough room for organizations to fully automate their Accounts Payable function with an eye towards achieving greater efficiency.
35% of the organizations still spend 10-30 mins time in processing each invoice along with inefficiencies in resolving supplier queries, thus there is a colossal opportunity to improve.
With E-invoicing mandates being rolled out by Governments, there is a significant push towards Accounts Payable automation. The key benefits of being adopter of this technology are listed below:
As per Institute Of Finance & Management (IOFM) benchmarks, highly automated Accounts Payable departments spend one-fourth the cost to process an invoice as compared to their peers. Automation eliminates costs like keying invoice information, matching invoices with PO, back & forth phone calls to resolve exceptions, preparing reports etc.
With automation, the manual effort is reduced and thereby reducing manual errors that occurs during processing. Based on benchmarks from IOFM and the Association for Intelligent Information
Management (AIIM) for invoice processing costs, an accounts payable department that processes 5,000 invoices per month stands to save $55,650 per month ($64,500 per month versus $8,850 per month) and $667,800 annually through accounts payable automation.
Accounts Payable automation also leads to considerable reduction of cycle time. Slow processes in an organization can affect businesses adversely. Accounts Payable automation is a twin blessing as faster invoice processing leads to timely payments and thus better vendor relationships at the same time automation leads to correct data entry, invoice validation and matching thus better and speedy reconciliation.
Manual invoice processing is not only time consuming and error prone but also is unable to provide real time visibility to cash flow. With Accounts Payable automation, an organization can eliminate all such uncertainties related to cash flow, thus providing a transparent real time picture of financial health.
Manual processing banks on audits for ensuring compliance and there is increased chances of fraudulent practices. Also, audits are costly and provides only partial view to compliance adherence. Since the implementation of Sarbanes-Oxley, internal controls to prevent fraud has become a necessity for every organization. Automated Accounts Payable integrates with it controls that provide better visibility, thus mitigating fraud and ensuring stringent compliance across the company.
Considering the advantage of going digital, all stakeholders involved in invoice processing can have simultaneous access to required files. This will enable an organization to break cross border barriers and promote more collaboration and productivity among its workforce.
Keeping in mind all the benefits that a business can reap by automating their Accounts Payable, Zycus has come up with solution that is capable of taking care of vital pain points of Accounts Payable team. In addition, Zycus Merlin Invoice Reader can digitize an invoice, transitioning the role of Accounts Payable team from tactical to strategic.
Lastly, the cognitive capability of Zycus’ product can manage Accounts Payable mail box and segregates mails into various folders depending upon supplier intent. Wow, right!
References: https://www.ipswrx.com/resources/insights/6-ways-accounts-payable-automation-reduces-costs-in-tough-times, Ardent Partners Accounts Payable Metrics that Matter