AP transformation Part Two: Time is money
When it comes to your accounts payable (AP) process and how cost effective it is, every second counts.
In this second installment of our “AP Transformation” series, we’ll explore the efficiency gains and benefits of utilizing an end-to-end AP solution. This includes exploring a real-life scenario of how this kind of solution empowered one company to streamline their AP and payment operations.
How end-to-end AP solutions pay off
An end-to-end AP automation solution has the potential to revolutionize the finances of a company and not just as it relates to cost savings. By integrating every stage of the accounts payable process, from invoice receipt to payment execution, into a centralized system, businesses can unlock endless advantages by reducing bottlenecks and inefficiencies. Let’s discuss some of them.
Faster invoice processing
Instead of time-consuming manual processes, like manual data entry, an end-to-end AP solution automatically captures information from invoices with invoice scanning technology. From there, AP workflow technology ensures that invoices are routed for review and approval based on predefined rules. This automated invoice approval workflow eliminates the need for manual routing and follow-ups. Overall, these features have proven to reduce invoice processing by 90%.
From a payments perspective, transactions are consolidated into a single payment file and executed to suppliers via electronic payment capabilities. There’s no need for paper checks, mailing, and manual reconciliation, resulting in faster payment processing.
All of these sped up processes translate to a lot of time saved – time that your AP team can use to focus on more strategic, value-generating efforts.
More accuracy
By embracing a comprehensive AP solution, you’re signing up for the digitization of invoices with almost 100% accuracy. When you rely on technology to extract invoice data, the risk of human error significantly decreases. Automating the approval process removes the possibility of duplicate payments and/or overpayments while ensuring accuracy with what’s known as three-way match capability, which matches supplier invoices to purchase orders (POs) and Receipt of Goods, without human intervention.
These solutions also address the challenge of integrating your enterprise resource planning (ERP) system with other systems. An end-to-end AP solution is designed to integrate seamlessly with any accounting or ERP system, decreasing the risk of data entry errors and discrepancies between accounts payable and other financial systems.
Electronic payments, something we already touched on as a time-saving tool, are more accurate and traceable than paper-based methods, reducing the risk of errors when processing vendor payments and ensuring timely payments.
When your AP and payments processes are more precise, it fosters efficiency. What’s more, not having to worry about errors that could strain vendor relationships, fosters peace of mind.
Improved cash flow
The wonderful thing about the previous efficiency gains we discussed is that they lead to what is usually most desired by companies – improved cash flow due to better cash flow management.
By making payments quicker, you open the door to taking advantage of early payment discounts while closing the door on late payments and potential late fees. Improved accuracy in accounts payable processes reduces the time and resources tied up in errors and unpaid invoices, allowing you to redirect working capital to support business operations and growth initiatives.
Also, solutions like Corcentric AP + Payments create opportunities to take advantage of rebates by monetizing the execution of payments through revenue generating payment methods.
AP transformation in the real world
It’s easy to tell you about all the benefits you can gain from an end-to-end accounts payable automation solution, but we know it’s more impactful if we provide you with an actual account of how impactful this combination of services and software can be.
Which brings us to an accounting firm looking to leverage electronic payment methods and provide a better enrollment experience for their suppliers. They landed on Corcentric AP + Payments as the solution to their challenges.
In just a little over a year after going live with the solution, the accounting firm started seeing outstanding results, including:
- 65% reduction in check volume (exceeding their goal of converting to 50% electronic in the first year)
- 62% reduction in the time it takes to pay invoices
- Rebates generated from virtual cards led to the solution being cost neutral in year one, which means moving forward this payment method will likely create positive cash flow
Given these efficiency gains, the company can focus on better forecasting and scaling the business.
Coming up in Part Three
There’s no denying that an end-to-end AP solution can transform your AP process from start to finish. Advanced AP automation software and dynamic payment optimization, enabled by managed services, guarantees ROI and drives continuous improvement. It’s a no-brainer for companies looking to leave DIY point solutions behind and embrace faster approvals, streamlined payments, and more working capital.
Make sure you check out the final part of this series, as we discuss how a comprehensive AP solution helps you and your AP department gain control of your finances with 100% visibility.