Despite that many humans are creatures of habit and may have accepted that manual processes are “fine,” the reality is that automating AP and back-office processes can save companies potentially thousands to millions of dollars. In a recent report by PayStream Advisors, Pitching ROI for Accounts Payable, they surveyed over 300 back-office employees, who reported that their top challenges were: manual routing of invoices for approval (25%), manual data entry and inefficient processes (23%) and majority of invoices received were in paper format (18%).
The report also cited that when companies don’t have an automated AP system, they rarely are able to capture early payment discounts, which can result in significant savings depending on company size and annual invoice volume. They estimate that automation can increase discount capture from 5% to 35%.
Another cost savings is in AP labor reduction, including dispute management. Research shows that 71% of AP departments spend between 1 to 8 hours per week processing issues. Based on average costs of a full time AP employee, one hour costs about $1,350. Through automation, manual errors, late payments, duplicate invoices and other issues, the AP labor costs can be reduced, not only by their time spent (show above), but in actual cycle times and processing of invoices that is no longer needed. In some cases the processing time can be decreased by up to 80%, which is the equivalent of going from 5 FTEs to only needing 1 FTE. Staff can be reallocated to more strategic positions.
BirchStreet offers an ROI calculator to help determine not only your AP savings, but your Supply Chain and Procurement savings. Cloud based, automated procure-to-pay (P2P) software systems save our customers an average of 10 to 20% by reducing their costs, which impacts the bottom line. Who doesn’t want to be a hero?
Contact us today for a free business evaluation or demo on how we can help your organization achieve efficiency, savings, compliance and visibility for all of your purchasing and accounting needs. Visit www.birchstreet.net or email firstname.lastname@example.org.