By Stephen Boals.
In the world of accounts payable, efficiency is the name of the game. Accounting staff must quickly process invoices, send payments to vendors, and proactively prevent disruptions to business cash flow. They are also expected to operate with nearly flawless accuracy, as even a single data entry error could be detrimental to critical business operations.
An exceptional Accounts Payable team is integral to the success of an organization. However, even the most talented accounts payable professionals can’t compete in the modern business environment if they don’t have the right tools and technology resources.
Specifically, accounts payable departments need intelligent document processing (IDP) technology. This technology can enable them to efficiently discharge their responsibilities and process a greater volume of invoices. Countless organizations have already realized the benefits of intelligent document processing technology and invested in quality IDP solutions. However, some organizational leaders have yet to take this leap.
Below, we bolster the case for IDP technology by providing seven compelling statistics for accounting departments. These statistics demonstrate why IDP technology is a vital resource for your accounts payable department.
1. 38% of businesses fail due to cash flow issues
According loan tree, 38% of startups and new businesses fail due to funding issues, i.e. poor budgets, projections, and attributions. An additional 20% find themselves overtaken by industry competitors. Cumulatively, these groups represent more than half of all failed businesses.
While cash flow problems can be particularly damaging for start-up businesses, a lack of funding can be detrimental to any business, even an established one. Cash flow disruptions can be attributed to many different factors. However, almost all of them can be linked or are associated with Accounts Payable inefficiency.
IDP technologies cannot eliminate all cash flow problems. However, these robust solutions can undoubtedly reduce the risk of human error. Automation technology can also help future-proof businesses reduce labor costs.
2. Trade discounts for early payment can save sellers and suppliers up to 1-5% on each invoice
Maintaining a positive relationship with vendors and suppliers is integral to the success of your business. Unfortunately for AP departments, a Ardent Report 2022 found that 20% of them receive late payments from suppliers. One way to avoid this is to offer incentives to receive payments earlier. A prepayment discount or trade discount is a way to finance a transaction. In this dealthe buyer pays the supplier less than the invoiced value at a time before the due date, which saves the buyer money while saving money.
Although these discounts are usually 1% to 2%, they can be higher. Even if your vendor partners offer relatively low discounts, these opportunities can add up to thousands of dollars over the course of a year.
3. 70% of SMBs still enter invoice data manually
A lack of automation in accounts payable departments can be particularly detrimental to small and medium-sized businesses (SMBs). SME are businesses that fall below a certain threshold in terms of revenue, assets or employees.
Accounts Payable inefficiencies can hinder the success of SMEs because 70% of them still receive paper invoices and rely on manual data entry procedures when processing these paper invoices. That said, 64% are willing to use electronic or automated processes in the future. By simply adopting IDP technologies, these companies could dramatically increase their efficiency.
4. 50% of accounting staff in the industry say their main goal is to eliminate manual invoice processing
Overreliance on paper-based employees and processes makes invoice processing a manual, labor-intensive process that leads to higher costs per invoice and lower operational efficiency. As such, 50% of industry accounting staff say their main goal is to eliminate manual invoice processing. An accounts payable solution with automation tools and intelligent document processing capabilities can dramatically increase employee productivity.
5. Digital workers or bots cost one-fifth the price of a full-time employee
Intelligent document processing solutions alone can dramatically increase the productivity of an accounts payable department. These productivity benefits are compounded when the IDP solution is combined with other automation technologies, such as robotic process automation (RPA) software. RPA solutions are only as good as the data embedded in bots, so having an IDP solution integrated with RPA will provide a more complete view of the data available. IDP and RPA solutions are often used in tandem as part of any hyperautomation strategy.
In a report on automation technology use cases In the financial sector, Gartner found that a “robotic employee” costs about one-fifth the price of a full-time, onshore employee.
6. 41% of enterprises are interested in upgrading their AP solution
Accounts Payable departments and organizational leaders are realizing the need to modernize outdated manual invoice processing procedures. Many accounts payable departments use some form of automation solution. However, these solutions may lack the desired capabilities and features.
This conclusion is not just speculation, as Forbes found that 41% of survey participants had planned to upgrade its AP automation technology last year, demonstrating the demand for cutting-edge intelligent document processing and automation solutions. What is even more telling is that the survey found that those who already had invoice processing still indicated that 68% were manually entering data into their ERP due to limited capture and extract functionality and the absence of an AI-based system.
7. IDP can reduce contactless handle time by 67.1%
The Ardent Partners Report explains that invoices that minimize or entirely eliminate human intervention in the loop (HITL) allow companies to reduce costs and create opportunities for capital increase. Best-in-class contactless processing with IDP can increase invoice processing by 67.1%.
Disruptions to cash flow, human data entry errors, slow or late response times, and invoice processing inefficiencies can disrupt a business’ day-to-day efficiency. When Accounts Payable departments streamline invoice processing and vendor payments through automation technologies, they have gained a distinct advantage over organizations that rely heavily on manual data entry methods.
While there are many different technologies your accounts payable department can implement to increase efficiency, choosing a robust and intelligent document processing platform is by far the most dynamic option on the market. Some IDP solutions offer validation or tolerance settings based on business rules, so if an invoice is fuzzy or if a field cannot be detected, the system alerts the user. This can provide a good option and higher accuracy to have a human in the loop.
Time and again, IDP demonstrates its value by helping customers increase invoice processing volume, improve efficiency and save costly labor hours each month. For example, using IDP technology, DH Pace was able to process an additional number 1,000 invoices per month. They save about 635 man-hours per month and the accounts payable department no longer performs manual data entry.
Whether you are a large enterprise or in the SMB market, using intelligent document processing can benefit any accounts payable or finance department. It’s time to take the plunge and integrate IDP into your hyperautomation strategy to gain efficiencies and save money.
Stephen Boals is responsible for strategy for Ephesoft. At Ephesoft, he has led top production partners, is a strong advocate for the benefits of intelligent document processing, and guides the company’s future vision in the hyperautomation space. His IDP experience spans 15 years, and he has managed transformation projects for Fortune 1000, governments and worked with the Big 4 consulting, IT and security management. He is a veteran and served as a Navy ship’s officer.