A recent research report by Ardent Partners, supply management experts, identified some crucial cost factors that are associated with Accounts Payable departments and their AP processing. Manual processes, especially related to purchasing, AP, inventory, recipes (F&B) and capital budgets, are inefficient and can be costly. Each year, more companies join the growing trend and decide to automate of these business processes.
Only examining the AP side of procure-to-pay processes, the report highlighted and identified “four key characteristics that can impact the efficiency and effectiveness of AP professionals: average cost per invoice, average invoice per FTE (hours worked by one full-time employee), average invoice cycle time and average invoice exception rate.”
Here’s a snapshot of what their research revealed:
- On average, paper invoices cost $14.21 each to process.
- The average full-time employee processes 2,308 invoices a month, and it takes an average of 12.4 days to process those documents through its entire cycle.
- The average exception rate is 13.1 percent.
- Best-in-class players using an automated system spend an average of $2.42 to process an invoice, with invoice processing times taking just 3.7 days.
Further, researchers identified the top concern in the AP department is the amount of time it takes to match and verify invoice information. AP professionals said that the approval times for invoicing and payment were too long.
This report can serve as a benchmark or guideline for companies to figure out if procure-to-pay platforms, including AP Automation and eInvoicing, can serve to improve their business processes. BirchStreet’s AP 3-Way Auto-Matching module matches the purchase order with the receiving documents and the invoice to ensure accurate pricing along with addressing the AP department’s top concern of the time consuming, manual matching processes. If the AP 3-Way Auto-Matching process identifies an exception, the system alerts the user for manual processing. If we take the findings above, and see that the average exception rate is 13.1%, that means that 86.9% of all invoices are going through automated processing, drastically reducing the processing costs and time.
Are you ready to reduce your AP costs? Contact us today for a complimentary analysis and demo of BirchStreet. Email: email@example.com or call 949-567-7000.