In this article, we look at how P&L cost savings can be gained by streamlining and automating the Accounts Payable function.
Accounts Payable automation enables financial professionals to strengthen controls, drive out costs and to increase process efficiency. Whilst there are many tools at their disposal to achieve this most are not always using these to the best effect.
Opportunities exist to use specialist invoice processing applications to reduce costly finance errors and move towards higher levels of automation to improve profitability.
- Labour costs: Costs associated with processing invoices – data rekeying, coding, checking, and approving invoices; plus reporting, scanning and filing
- Document management: The cost related to paper invoices being shipped, faxed, copied, routed and shuffled from one location to another; plus storage and retrieval
- Payment delays: A slow invoice matching process means late payments, which can result in interest penalties, lost invoice discounts and damaged supplier relationships
- Duplicate payments: When invoices are lost or delayed in processing, the supplier often sends a duplicate invoice which can get paid unnecessarily
- Early settlement discounts: Many vendors offer settlement discounts for early payment of invoiced amounts. An efficient process will enable the ability to pay on time or early and in line with organisational targets
- Financial forecasting: Organisations that deploy an invoice automation solution enable greater financial forecasting and enhanced working capital management
- Expense fraud: A lack of internal controls can leave organisations exposed to unnecessary costs from expense reimbursement fraud e.g. over-claims
- Audit charges: Auditors need to assess payment information, which can be extremely time consuming if the records are difficult to access