There’s no doubt that finance leaders are realizing the value of automating their invoice and payment (AP) processing workflows. According to the Institute of Finance Management research, an eye-popping 84 percent of accounts payable practitioners are optimistic about the progress their department will make over the next three years in eliminating paper invoices.1 The reasons are clear. We’ve all heard them: Saving time, saving money, and increasing efficiencies and staff productivity.
But for finance leaders, what does that mean exactly? And how do the benefits of AP automation translate directly to the bottom line? Let’s look at the dollars and “sense” of it.
Increased productivity
Industry reports cite better staff productivity as the top reason for automating. Highly automated accounts payable departments process 16 times as many invoices per FTE each month as their peers with little or no automation, per Institute of Finance Management’s (IOFM’s) Is Your AP Performance Top Tier?2 —1,350 invoices per full-time employee processing manually versus 22,756 invoices per FTE with a highly automated workflow, to be exact. Simply put, you can do more with your existing staff. Not only that, staff will be freed to do more strategic value-added work, such as improving supplier relationships and leveraging early payment discounts (more on that later).
Sage Intacct client, Tim Carter, CFO, Salsarita’s Fresh Mexican Grill, knows.
“Rather than hiring additional people, give your existing staff the automation tools to make their roles multi-faceted. Your finance department—all departments for that matter—can run lean and take on more strategic, value-added duties. Had we not implemented the Sage Intacct Marketplace Partner Yooz AP automation solution, we would have had to hire additional bookkeeping staff by now.”
The Dollars and Sense? Multiply the salary/wages of one AP department full-time employee times the number of staff you would need to hire as your processing volume grows. That’s how much you’ll save with an automated AP solution.
Capture 97 percent of early payment discounts offered
Eighty percent of the businesses surveyed for IOFM’s AP department benchmarking report3receive invoices that offer discounts on the invoice due amount in exchange for early payment. With an automated system and the ability for approvers to access documents in the Cloud from anywhere at any time, invoices move efficiently through the process. No more lost invoices. No more late payments.
The Dollars and Sense? Multiply the average dollar volume of invoices paid per month by 10% (the average early payment discount offered by suppliers). That’s how much you have the potential to save with an automated AP processing solution.
Save money on shipping and storing of documents
When finance leaders think about the costs of processing invoices, they might only consider the number of staff and time it takes each to manually enter data, track down lost invoices, and get approvals. But what about the costs to ship invoices to a central location for processing via courier or overnight service? Or storing boxes and boxes of paper documents? Those are real tangible costs that are eliminated with automation.
Ask Sage Intacct clients Tim Carter, CFO, Salsarita’s Fresh Mexican Grill and Bryan Schmidt, controller, UNITE HERE HEALTH. They were each faced with not only shipping documents to a central location for processing, but also spending more money on storing and shredding documents, to the tune of hundreds, even thousands of dollars per year.
The Dollars and Sense? Easy! Tally up the total dollars spent each year on the shipping, shredding, and storing line item on your expense sheet. When that number becomes $0 with an advanced AP automation solution, the savings go straight to the bottom line.
Spend only $2.36 to process a single invoice
Automation eliminates the manual processes that drive up the cost of accounts payable processing—to the tune of more than $15 per invoice on average4—including additional staff as the volume of invoices to process increases, keying invoice data, physically routing invoices for approval, filing invoices, and all the things we’ve covered so far in this blog. Levvel Research puts the numbers to it when they report a decrease in the cost of invoice processing by a whopping 84% to only $2.36/invoice on average5.
The Dollars and Sense? Patsy Price, director of operations, at Peterson Auto Group, saved more than $35,000/year when she switched from a manual AP workflow to a smart, cloud-based AP automation solution. Real savings translated into real profits.
Now those are dollars you can make sense of!
The Yooz multiple award-winning AP automation solution solves today’s finance professionals’ top invoice payment processing (AP) workflow challenges by providing a simple, secure, end-to-end solution that integrates seamlessly with the Sage Intacct system. It leverages and optimizes powerful features and emerging technologies that unleash the creative and innovative power of your team. Simplicity, savings, speed, traceability, security, and zero risk form the hallmark foundation of Yooz and influences everything it does.
1Special Report: 2018 Future of Accounts Payable Survey: Digital, Profitable, Strategic. An AP & P2P whitepaper. Institute of Finance Management.
2-3Is Your AP Performance Top Tier? 2017 Benchmark Report. An AP & P2P report. Institute of Finance Management.
4-52018 Guide to Payables Automation. Level Research.