Technology allows us to have real-time communication around the world, purchase anything we can think of without leaving our computer chairs, and store an essentially limitless amount of information without regard to physical space. Without a doubt, the future is now.
If we have all of these great technologies at our disposal, then why are most accounts payable organizations less than automated? Why is it that accounts payable departments often feel like analog visitors in a digital world?
A majority of accounts payable departments are still using manual processes. According to benchmark data published on The Accounts Payable Network, just 38 percent of AP departments have automated workflow technology. Only slightly more – 40 percent – even have front-end scanning.
These technologies at minimum are necessary to cut paper out of the AP process and see real cost benefits. Without them, you will mire your organization in paper. Copies of paper invoices will be scattered around the organization with no indication of whether anyone approved them, and documents will get lost, damaged, or simply sit ignored on an approver’s desk.
Front-end imaging allows organizations to turn paper invoices into electronic data the moment they enter your organization. To be successful, this typically means shredding the paper originals once you’ve verified the legibility of the image.
Meanwhile, automated workflow lets you route the documents to the proper approvers, while including business rules to ensure the process’ integrity. For instance, workflow technology prevents unauthorized employees from approving invoices. In addition, invoices cannot sit in an approver’s queue untouched for long. They can be set to automatically route to a manager after a specific period of inactivity.
With the improvements that these technologies can bring to AP, it’s surprising that less than half of AP departments are using them. When it comes to electronic invoicing – which is technology that allows suppliers to load invoices directly into their buyer’s accounting system – only 10 percent of departments are using that.
Why isn’t every organization running an automated accounts payable department? There are several answers to that question. For some businesses, it’s a matter of economics. The costs of implementing new technologies can be significant. In other cases, organizations may not want the disruptions that a major technology can bring. And, often, it may just be that management does not think that they need to replace their manual processes.
Convincing management that the cost and disruptions are necessary hinges on the strength of your business case. Address cost concerns by outlining how automating the process will save time and money and allow you to reduce headcount. Also, clearly outline inefficiencies in your existing process and describe how automation can help eliminate them.
If you’ve made your case properly, which includes having metrics and benchmarks to back up your recommendation to automate, then you are more likely to get management approval for your technology implementation.
Without that approval, then your AP department could continue to live in the payables dark ages while your peers enter the space age.