The reduction in accounts payable processing costs is a huge component in the ROI of AP automation. The first step in defining the benefits of AP automation is going through a process mapping exercise of the procure-to-pay process. When companies review the results of their process mapping exercise one thing almost always becomes clear: purchase order to invoice matching automation significantly reduces accounts payable processing costs, and has a meaningful impact on a company’s bottom line.
Great, but aren’t purchase orders only for manufacturing companies? Maybe 10 years ago, but now, the vast majority of growing businesses, including services companies, use purchase orders as a means to streamline and control purchasing activity, while also gaining visibility into the impact of spending on their budgets. Approved purchases result in purchase orders being issued by buying organizations to their suppliers and vendors. Vendors fulfill purchases – by delivering goods and services – and then present invoices for payment against the purchase orders.
While purchase orders provide greater visibility and control, they also create headaches for AP departments. For instance, invoices presented against purchase orders may cite the original purchase order, but it is rarely the case that invoice data – header and line-level information – precisely match the cited purchase order. The result is that AP departments must manually match and reconcile the presented invoice against the cited purchase order – a task that is laborious, expensive, and error prone.
Busting the common accounts payable automation myths.View Whitepaper