5 Reasons Companies are Falling Behind with Accounts Payable Automation
Chances are, you’ve heard about the advantages of moving toward an automated accounts payable (AP) workflow. The reasons to eliminate as much paper and as many manual processes as possible are clear and familiar:
- Electronic transactions cost less, proceed faster and have fewer errors than paper-based POs, invoices, and payments.
- You can securely monitor the status of electronic invoices in real time.
- Automated accounts payable allows business intelligence systems to capture and analyze purchasing data that can improve a company’s competitiveness.
- When organizations save time with automated accounts payable, they can redeploy human resources to move valuable areas of the organization.
But a surprising number of companies still aren’t there yet. Many large companies have developed automated accounts payable systems and leveraged them to the point where some even claim to have transformed their AP departments from cost centers to profit centers. But many companies in the $ 200 million to $ 3 billion range have yet to adopt pervasive automated AP although they realize its advantages. One study reported that more than 90 percent of medium-sized companies still use paper invoices to some extent and about 80 percent use paper for more than half of the invoices they process.
There are a number of reasons why medium-sized businesses have lagged in deploying and leveraging automated accounts payable technology.
Not enough money
Some organizations simply believe they lack the capital to invest in automated AP.
Too Few Invoices
Large companies led the way because the volume of invoices they process made the business case to invest in automated AP a compelling one. Medium-sized companies, however, typically process fewer than 10,000 invoices per month.
No executive sponsorship
A number of organizations don’t have the executive sponsorship an automated AP initiative needs or have yet to formulate a convincing business case for it.
Shorthanded IT staff
Many mid-sized companies have other IT-related projects they have prioritized higher than automated AP deployment, or believe that they lack the IT resources necessary to develop automated AP capability.
Some organizations simply don’t believe the available solutions are compelling enough.
Whatever the reasons your company has for not pursuing automated accounts payable, the advantages of AP automation are clear and overwhelming. Nearly every company has opportunities to move some AP processes or information into the digital realm. The key is to discover where those opportunities are, and to understand the range of solutions available for your opportunities.