What is Invoice Automation?
AP automation is the use of software to digitize the vendor invoicing process and create faster, leaner, more cost-effective AP workflows. No more paper receipts. No forwarding invoices in email. No cutting paper checks. Automation lets you eliminate manual AP tasks, increase visibility into spend, and control costs like never before.
Why should you automate accounts payable?
It would be difficult to overstate how significantly AP automation contributes to an organization’s overall success. To give you an idea, here are a handful of ways that automation can help:
- Control costs and reduce unnecessary spend (like invoice processing costs and check fees).
- Boost employee morale and give staff more time or strategic tasks.
- Attract and retain top AP talent (if you offer automation rather than manual processes, it’s far more likely that staff will love their jobs and stick around).
- Reduce errors and duplications that come from manual data entry.
- Uncover data that will help you make informed decisions.
- Increase policy compliance and strengthen vendor relationships.
True, upgrading to an automated system requires an investment like any new tool. That said, in today’s fast-paced, always-shifting business environment, organizations that don’t automate will struggle to compete and miss opportunities for growth. Which means that you easily could argue that companies can’t afford NOT to invest in automation.
Plus, if you compare the cost of automating to the time and expense of continuing to do AP manually, the return on your investment is easy to see.
Consider this: The Institute of Finance Management (IOFM) puts the cost of manually processing a single vendor invoice at $10 to $23 per invoice; automating vendor invoice management can reduce the cost of processing one invoice by up to 80%.
Think about how many invoices you process in a single week alone. Or an entire year. You’ve just learned that there’s a way to save 80% on each one. Let that sink in.
Given the obvious and numerous upsides to automation, the question isn’t why should you automate AP. The real question is, “why wouldn’t you?”
Who benefits from AP automation?
Automation isn’t a luxury reserved for large enterprises with big budgets. Every company, from local mom-and-pop shops, to high-ambition startups, to enormous multinational corporations with tens of thousands of employees, can and/or already have automated AP. It’s really just a matter of tailoring a solution to a company’s size and specific needs.
The Business Value of Invoice Automation
The move to automate AP touches and benefits everyone within an organization.
- CFOs see spend more clearly and can better plan, discover new opportunities for growth, and control spend more effectively.
- CIOs and IT leaders create a secure, modern tech environment that complies with U.S. data privacy regulations.
- Controllers and AP managers get a complete view of employee and vendor spend, can create and manage policies, and contain spend.
- CEOs and business owners? They sit at the head of an efficient, cost-effective, modern organization that’s ready for future growth. (Not to mention the satisfaction they get knowing they’ve enabled this AP utopia and made employee’s lives easier.)
The Business Value of Invoice Automation
What are AP automation best practices?
Improving AP isn’t simply a matter of finding newer, faster ways to shuffle paper. Real improvement comes from addressing underlying systems and bringing spend management together into a single, integrated, easy-to-use solution.
Once you’ve committed to this idea, the next step is to figure out what to look for in an automated AP solution. To help you get started, here are a handful of capabilities to consider. A good automated AP process should:
- Pair OCR capture with a team of company-badged human auditors
- Have a plan for implementing artificial intelligence (AI) in the future
- Offer a comprehensive view into spending through dashboards, reports, and key metrics
- Allow you to instantly pinpoint where any invoice is in the approval process
- Have a mobile solution for iOS and Android
- Offer a diverse payment provider ecosystem to send electronic payments to vendors (which results in greater efficiency and more cash on hand)
- Allow your AP team route invoices based on custom rules, exception guidelines, and processes
- Automate the time-intensive and error-prone process of matching invoices, POs, and goods received (three-way match)
- Integrate with systems you already have in place (e.g. your existing financial system/ERP)
- Have a vendor portal for questions and easy access to invoice status
- Capture all vendor invoices in one central location to eliminate lost paper invoices and get bills to the appropriate approver
You’ve seen how automation can help your organization. You’ve glimpsed an inefficient and expensive future that comes from sticking with manual AP. You know what to look for in a good automated solution. You’re ready. That said, we get that this is a big decision. To learn more and help you decide, check out our AP automation page, take a deeper dive on what look for when choosing an automated AP solution, and visit our Concur Invoice solution. Want to try it for yourself? Check out our self-guided Concur Invoice demo to see for yourself how automated AP management works.