Why is Accounts Payable Out of Control?

June 6, 2018

By Mark Brousseau, Analyst and Researcher in Business Process Automation, Brousseau & Associates

If it feels like your accounts payable operations are out of control, you are
not imagining things:

  • Accounts payable is the most paper-intensive finance and administration function.
  • Labor represents an astounding 60 percent of the costs of accounts payable processing
  • Only 4 percent of accounts payable departments can pay all their invoices on-time
  • Forty-five percent of businesses struggle to access invoices and payables information

When you look at these statistics from the Institute of Finance and Management (IOFM), you can’t help but wonder how things got so out of control in accounts payable. After all, more organizations are investing in state-of-the-art enterprise resource planning (ERP) platforms. The problem is that most businesses haven’t gotten around to automating the invoice processes that feed their ERP.

 

27% of an accounts payable
practitioner’s time is spent on
activities that are wasteful or
should be automated,
PriceWaterhouseCoopers’
benchmark data shows.

 

Less than one-quarter of accounts payable departments operate in a highly automated environment where invoices are posted to an ERP straight-through, without human intervention, IOFM finds.

As a result, many accounts payable departments are suffering from:

  • Long invoice approval cycle times
  • High invoice process costs
  • A high percentage of invoice exceptions
  • Slow delivery of invoice information to the ERP
  • Missed opportunities to capture early payment discounts
  • Strained supplier relationships

Things will get worse for accounts payable departments that drag their feet on automation. Most accounts payable leaders expect that their processing requirements will become more complex over the next three years, per IOFM’s 2018 Future of Accounts Payable Survey. With businesses eager to improve profitability to drive growth and innovation, accounts payable departments must automate.

Deploying an ERP platform is a first step towards getting control of accounts payable operations.

But businesses also must automate their invoice processing with a solution that provides:

  • Intelligent document scanning and data extraction for ingesting paper and electronic invoices
  • Two-way and three-way matching of invoices to purchase orders and shipping documents
  • Digital workflows for invoice approvals and exceptions handling
  • Real-time visibility into the status of invoices and Key Performance Indicators (KPIs)
  • Tight integration with any legacy ERP to post invoice data without manual keying
  • Anywhere, anytime access to invoice and payables data via PC, laptop or mobile device

Combining an ERP platform with an automated invoice processing solution puts accounts payable in control of its operations. To learn more about Accounts Payable Automation Solutions offered by Canon, join us at a demo webinar – register here.