AP automation is a term used to describe the ongoing effort of many companies to streamline the business process of their accounts payable departments. The accounts payable department’s main responsibility is to process and review transactions between the company and its suppliers.
Automating the invoice payment process.
• Invoice Capture: Receives paper or electronic invoices, captures important data, and inputs into a workflow or payment system
• Workflow/Approval: Routes invoice for approval
• Payment and Reconciliation: Processes vendor payments via a number of payment methods (AP Card, ACH, check, wire, Supply Chain Finance)
Why the need? Do the math!
Companies are looking to increase process efficiencies and reduce costs. Let’s look at the average invoice processing costs:
• The average manual AP invoice costs $30.00 and the average AR invoice $4.00 per invoice.
• On average the cost of a fully automated AP invoice is $3.50 and the AR invoice $2.25 per invoice.
• The cost savings for the AP invoice is $26.50 per invoice and $1.75 for each AR invoice.
• That‘s a 90% cost savings for the AP invoice and 44% for the AR invoice.
Then consider the average invoice storage cost:
• A paper invoice storage cost is $3.90 per invoice and the AR invoice is $1.90.
• Whereas the electronic invoice storage cost $1.30 per invoice and the AR invoice is $1.30.
• The cost savings for the AP invoice is $2.60 per invoice and $.60 for each AR invoice.
• That‘s a 67% cost savings for the AP invoice and 32% for the AR invoice.
The cost savings are significant, but even better; there is a 37% error reduction with automated invoicing.
What does AP Automation mean to me?
• Automated entry of invoice information
• Exception Invoices routed to proper workbasket for processing
• Electronically route invoices for review/approval
• Focus on exception and vendor analysis
• No manual filing or retrieval
• Complete audit trail
What to look for in a solution.
The AP automation provider is one of the determinants deciding the success or failure of your AP project. You should consider a vendor that can equip your company with all of the features your AP department needs. iCapture is a typical example that provides a layered approach to the invoice problem, helping you improve efficiency and many other benefits. Check that the software can be easily integrated with your other systems. Learn about the software’s security and compliance options. Most importantly, insure that the solution can be tailored to your organizations size and scope and fits your specific needs and will integrate with your ERP system.
Since 1994, inFORM Decisions has been a Document Automation provider specializing in state of the art Document Automation solutions for the IBM i – iSeries – AS/400 arena. We are committed to the IBM i iSeries AS/400 platform forever!
Want to fully understand the AP automation and discuss your needs? Contact inFORM Decisions today at (800) 858-5544 / (949) 709-5838 or visit us at www.informdecisions.com for more information about our acclaimed suite of products and see how we can help you reduce paper, increase productivity and lower your costs.