PayStream has released a report about Invoice Approval Workflow Automation that shows some interesting trends.
The biggest pain point for companies is invoice capture outside of their ERPs. Many organizations lack the budget for digital transformation of the back office. And a large percentage think their current processes work fine – in spite of the challenges they are facing in AP.
The report is the result of surveying 400 back office employees to find out the state of invoice management issues across various industries and market segments.
Paystream Advisors found that although most organizations report their main pain points as manual data entry, manual routing of invoices and high volumes of paper invoices, 30% are yet to consider introducing automation in their Accounts Payable (AP) departments. This is mainly due to a lack of available budget, or the belief that their current processes are working, despite the efficiencies that can be gained from Invoice Workflow Automation, or IWA.
Grappling with all the ways companies currently receive invoices outside of their ERP continues to be an issue. Efficient invoices are described as those that are in EDI format, or invoices submitted through a solution portal. Unfortunately, paper and email are the dominant form of invoices received – formats that take a lot of effort to digitize and make ready for their ERP.
As a result, AP departments spend a lot of time and effort performing data entry, as well as the manual handling that paper processes entail. Which is one of the reasons why companies are seeing a decent ROI when they switched to an automation solution that takes care of invoice data capture.
Accounts Payable Challenges
There are variations in the pain points across different revenue segments. Invoice lifecycle management bogs down companies that are growing, with such things as routing issues, lost or missing invoices, decentralized invoice receipt, and time and labour intensive data entry. Exceptions also cause bottlenecks, as the more data there is, the more issues around mismatched (and misplaced) documents.
Financial organizations are ahead of the pack in this area, implementing AP automation solutions to help resolve these issues, as opposed to industries which are lagging in a cohesive back office optimization strategy.
Organizations That Benefit
For organizations that have taken the plunge, invoice approval workflow automation has given them a boost in productivity in several areas:
- Shorter approval cycle times
- More productive employees
- Lower processing costs
- Improved visibility of liabilities
- Better compliance (SOX, FASB)
- Reductions in late payment penalties
72% of organizations with an IWA solution see quicker approval times on invoices, 57% report greater productivity and 46% have said that their processing costs have come down after implementing an IWA solution.
Other benefits reported include improved visibility over liabilities (26%), improved compliance with regulatory requirements (21%) and a reduction in late payment penalties and interest (21%).
Achieving IWA success
The new report also provides advice on how to choose and deploy the right IWA solution for your business. This will depend on the organization’s AP operations and vary according to their size, industry, and revenue. Organizations should properly map out their current state to pinpoint where improvements can be made, and which IWA provider would best suit their needs.
Key deciding factors include the types of invoices the organization deals with, and mapping these by paper, EDI, fax, email, and web portal receipt type. For example, a company with high volumes of paper may opt for a provider that enables a phased transition into more digitized methods without disrupting the status quo too rapidly.
You can download the report published December 2017, PayStream Advisors: Invoice Workflow Automation Report here.
Or explore Palette’s Intelligent AP Automation and Capture Solution here.