How to Redirect Time to Value-Added Projects with AP Automation
With lots to do and only so many hours in the day, time constraints are perhaps the most common – and operationally difficult to mitigate – problem facing companies. It’s part of the reason why nearly 80 percent of adults are stressed either sometimes or frequently on a daily basis, according to a recent Gallup poll.
This feeling of constraint has a major impact on nearly every aspect of business operations, even with accounts payable. With invoices coming in and going out constantly, time isn’t on the side of the AP Team, who must routinely thread a tricky needle involving scheduling payments, obtaining approvals, processing and archiving completed invoices – all in a timely manner. The “timely” aspect of AP is no small part of profitability for businesses: According to the Atradius Payment Practices Barometer survey, nearly half of late payments on B2B invoices are caused by liquidity problems, with banking inefficiencies the second most common reason.
While there are plenty of reasons why payments aren’t issued or received on time, AP personnel know the simplest explanation is that manually processing invoices takes a significant amount of time. According to Aberdeen Research, even at its fastest, most companies take between 3.5 to 2.3 days to process a single invoice – with many companies taking far longer.
This, combined with the cost savings, has been a major driver for the adoption of accounts payable automation solutions – allowing businesses to streamline their invoice-to-payment process, turning the time-consuming and laborious process of manual AP into something quick and seamless. In short, AP automation has enabled workplaces to do more with their time by expediting formerly lengthy tasks.
Armed with this extra time, here are a few of the ways businesses can derive additional operational value out of newly freed up schedules thanks to accounts payable automation:
Focus on Compliance
Compliance is not confined to any one particular industry – it touches virtually all of them in one form or another. As regulations shift, change and pile up, keeping up with protocols has put a strain on already taxed AP teams. AP automation gives businesses the time and freedom to audit user and vendor protocols with an eye for compliance, including looking at:
- Service level agreements.
- Vendor agreements and contracts.
- Terms of service agreements.
Managing Business Strategy and Execution
Setting goals is something that many Americans aim to do, but all too often don’t go about planning how they’ll accomplish their aims. Automating invoice and payment workflows can give AP managers the time they need to map out a course of action for the rest of the quarter. Ninety-three percent of respondents in a recent Accountemps poll agreed with the sentiment that goal setting is important to on-the-job performance, with nearly two-thirds considering it to be “very important.”
Freed from the constraints of manual invoice processing, AP personnel can better turn their attention to goal achievement and strategy execution, with an eye for measuring KPIs. With more time to review processes, AP workers can look at the following sample KPIs and measure their specific value to the business as whole:
- Amount of invoices employees process each day.
- Automated payments as a percentage of the overall total.
- Average time to approve from start (receipt) to finish (payment).
Understanding the specific drivers of profitability is critical: According to the Harvard Business Review, over 80 percent of managers say that their business goals are limited in number, specific and measurable, which is a critical measure of success.
Finding Time for Professional Development
Putting in extra hours at the office may happen now and again, but all too often, the time is devoted to menial tasks, the kind that can stymie professional development. AP automation helps free managers from tedious, low-value tasks so they can take on new responsibilities and put time into continued development.
The added time and attention devoted to professional development can help improve workplace productivity, from the simple fact that AP personnel are getting more work done and assuming roles they didn’t before – but in less time than it normally would take sans AP automation. AP personnel can work towards becoming more involved with overall business finances, take professional development training courses and spend more time reviewing more high-level processes.
These are just a few of the ways financial professionals and businesses can take advantage of accounts payable automation to reduce frantic timelines and turn their attention to other operationally critical activities, making the workday more efficient, cost-effective and less hectic. The simple truth is that AP automation has a cascading optimization effect starting in a business’ accounts and financial department and trickling down to the entire organization.
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