When was the last time you took a close look at your current accounts payable process? Cutting costs and boosting profits are a priority for most businesses, but many do not realize the hidden costs of simply paying the bills. In fact, the average cost to process a single invoice is $12.90 according to research from the Association for Image and Information Management. Fortunately, you can get those costs under control and achieve valuable business insights by gaining greater visibility into your accounts payable process. Here are three steps to get you started on taking command of your invoice processing.
Step 1: Review your current AP system
A full audit of your system is likely to reveal a host of hidden opportunities to gain greater efficiency, reduce costs and improve the overall experience for employees. Some things to keep in mind: How many invoices does your business receive by mail? How many people are involved in the review and approval process? How much does the business pay in late fees? These small costs add up quickly. A typical small to midsize business processes 450 invoices a month with a duplication rate of 1.29%, and labor costs typically make up 62% of total AP costs.
Step 2: Determine where you can save time
An audit will likely reveal areas of redundancy and spots that can easily be cut or reworked to save your team time. When looking to make some updates to your process, consider centralizing where invoices are sent to prevent confusion, reduce delays, and keep multiple copies from circulating. Businesses also increasingly are importing invoice images directly into their finance tool for faster cross-checking and easier auditing.
Step 3: Remove the margin for human error with automation
Mistakes happen, but there are ways to reduce these errors with automation. In fact, 86% of business are moving away from manual AP tasks, and 82% have implemented largely automated AP processes. Being fully automated means all invoices, processing, approvals, and communications happen through a software tool. When your invoices are accurately captured and your financial data is correct, you can easily pull reports and get the visibility you need to make smarter, more strategic business decisions.
Take command of your invoice processing today
Gaining greater insight into the accounts payable process can have a big impact on your bottom line. These three steps are just a start. There are many more opportunities and possibilities for streamlining and gaining insights from your AP process. Learn more in an on-demand webinar, hosted by Accounting Today: Take Command of Invoice Processing in 10 Steps.